1951-04-24

PRIVILEGE


Mr. E. W. George (Westmorland):: Mr. Speaker, I rise on a question of privilege. The hon. member for Royal (Mr. Brooks) is recorded on page 2273 of Hansard as having said:
Only last year it was decided to build a cement factory in my constituency of Royal, at a place called Havelock, with the result that today the Canada Cement Company is building a plant there.
I am sure the hon. member wants to keep the record straight. It is quite true that the town of Havelock is in the constituency of Royal, but the Canada Cement plant is being built in my riding, which is the constituency of Westmorland.


Mr. Brooks:: I would point out, Mr. Speaker, it is on the border of the constituency of Royal and the constituency of Westmorland.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day: '
Mr. Clarence Gillis (Cape Breton South):: I should like to direct a question to the Minister of National Defence. Has the minister's attention been called to a press dispatch carried in the Montreal Gazette this morning to the effect that his department intends to organize a women's division in the R.C.A.F.? If that is correct, will the minister indicate why these announcements are not made to the house rather than to the press?


Hon. Brooke Claxlon (Minister of National Defence):: Mr. Speaker, the answer to the first question, as to whether my attention has been called to this press dispatch, is yes. The answer to the second question, as to whether it is in accordance with the intention of the department, it is partly so, and I shall explain that in a moment. The third question was: Why are these announcements not made to the House of Commons rather than through press statements? Whenever it is possible they are made to the House of Commons. There was no announcement made through any press statement, but there was some intelligent
speculation on the part of the press, based on an article in an R.C.A.F. publication, which was prepared even before the decision had been made to have some women in the armed forces.
My intention was to make a statement about this when the defence estimates came up for consideration. Hon. members will recall that the Prime Minister suggested on April 11 that this might take place on April 12, very nearly two weeks ago. I was prepared to make a statement on this subject at that time which would have prevented the intelligent anticipation of this by the press. Since the question has been asked, perhaps I might be permitted to make that statement now, because it is a matter of widespread interest. This is what I had intended to say on April 12:
Experience in the last war demonstrated that there were a number of jobs in the armed forces which could be filled very satisfactorily by women, but it was recognized that there were disadvantages connected with their employment in peacetime in relatively small armed forces. For one thing the career opportunities were not likely to be great enough to attract women having the necessary qualities of leadership to meet a large increase in the event of war.
For this reason following the conclusion of hostilities the women's corps in the Canadian navy, army and air force were not set up as part of the new peacetime forces.
But now, with the expansion of our armed forces, there is a real need for a limited number of women to carry out duties for which they are specially fitted.
In all three services there are a number of such duties which experience has shown can be done as well or better by women than by men. Clerks and stenographers are obvious illustrations. There is also a whole new group of occupations related to radar and communications. Ground control of ships or aircraft or anti-aircraft guns requiring the use of radar involves, in addition to the operators themselves, personnel to compute the course of the moving ships or aircraft. Moreover, today practically all non-operational telecommunications are carried on by teletype. Active and reserve units are hooked up in nation-wide networks involving the employment of large numbers

Inquiries of the Ministry of skilled personnel. A large part of this work can be very well done by women.
Further, in the event of a general war, manpower shortages would make it essential to employ women on an even larger range of duties in the armed forces for which it would be desirable now to have a relatively small nucleus.
Accordingly, we have decided to recruit a limited number of women for the regular air force and for the reserve forces of the navy, army and air force.
It is not expected that there will be separate corps or establishments for women at the outset. In a unit or formation they will fill a place normally filled by a man.
No women will be enlisted to do clerical work at headquarters. So far as possible we will continue to have this work done by civilians.
It is expected that recruiting will commence this summer.



RAILWAY ACT


[Stage Direction]
On the orders of the day:
Mr. H. R. Argue (Assiniboia):: I should like to direct a question to the Minister of Transport, arising out of a Canadian Press dispatch in this morning's Gazette to the effect that the railways have applied for a further fourteen or fifteen per cent increase in freight rates. Can the minister indicate whether the proposed amendments to the Railway Act will be introduced during the present session, or in any event before the board of transport commissioners disposes of the new application of the railways for a further increase in freight rates?


Hon. Lionel Chevrier (Minister of Transport):: The hon. member was good
enough to send me notice of his question, but I received it just as I was coming into the house. The committee in the Department of Transport that is dealing with the amendments to the Railway Act has not yet completed its studies; therefore the government has not had an opportunity to deal with the draft legislation. I hope, however, that it will be possible to introduce the amendments during this session.



COMPENSATION FOR T.B. REACTORS

[Stage Direction]
On the orders of the day:
Mr. L. E. Cardiff (Huron North):: I should like to ask the Minister of Agriculture a question with regard to the cattle in my district that have reacted to the tuberculin test.
The farmers have not yet been paid for the animals that have been condemned. It is now six months or more since the test was made. Many of the farmers had to replace the cattle and borrow the money to do it. Why has this money not been available?


Right Hon. J. G. Gardiner (Minister of Agriculture):: I shall get the information necessary to answer the question, and will give the answer tomorrow or the next day.



OLD AGE PENSIONS


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: I wish to direct a question to the Minister of National Health and Welfare. Was the minister correctly quoted in a Canadian Press dispatch which appeared over the week endi reporting him as expressing the hope that old age pensions would be dealt with at this session? Does that hope include legislation implementing the recommendations of last year's committee on old age security as well as any amendment to the constitution?


Hon. Paul Marlin (Minister of National Health and Welfare):: I can add nothing to what was said by the Prime Minister on February 5, during this session.


Stanley Howard Knowles: In view of that answer, Mr. Speaker, may I direct a supplementary question to the Prime Minister? His answer to me on February 5 I well remember. Will the Prime Minister clarify for the house the statement he is reported to have made in Montreal over the week end? May I be permitted to put my question in this specific form: Did the Prime Minister's reported reference to the need of going slowly with regard to social security measures have any bearing on the plan recommended last year concerning which there has been some discussion at this session?


Right Hon. L. S. St. Laurent (Prime Minister):: None whatsoever, Mr. Speaker.


Stanley Howard Knowles: Good.



PASSPORTS


[Stage Direction]
On the orders of the day:
Mrs. Ellen L. Fairclough (Hamilton West):: In the absence of the Secretary of State for External Affairs, I should like to direct a question to the Prime Minister, in view of the announcement made on the radio today and in the morning paper with reference to

statements of Benjamin Gitlow in the United States un-American activities probe. I wonder if the Prime Minister would give assurance that conditions which prevailed a few years ago, and which permitted Gitlow to procure a Canadian passport, although he was a United States citizen, do not now exist, and that such a thing could not now happen? Is there sufficient surveillance of applicants for passports so that this situation could not recur?


Louis Stephen St-Laurent: I do not know just what may have happened a few years ago but I know that for the last four or five years close attention has been given to tightening up the regulations with respect to the issuing of passports. I would hope that we have now closed all the loopholes that were discovered in the regulations which were in effect some years ago. I think that we now have pretty strict control, and the general indication is that in any case of doubt about an application the Secretary of State for External Affairs himself should be consulted.



ARREST OF MISSIONARY SISTERS BY CHINESE COMMUNISTS

[Stage Direction]
On the orders of the day:
Mr. Jean Lesage (Parliamentary Assistant to the Secretary of State for External Affairs):: On Friday last the hon. member for Kamloops (Mr. Fulton) asked me if the department was in possession of any information on the reported arrest early last week of further Canadian missionary sisters. I have made thorough inquiries, and find that there is no information to that effect.



THE BUDGET


[Stage Direction]
The house resumed, from Monday, April 23, consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell (Greenwood), and the amendment to the amendment of Mr. Coldwell.
Mr. E. D. Fulion (Kamloops):: Mr. Speaker, in dealing with this budget and the amendments to the motion now before us, I am sure that all members of the house-and I am confident I speak at least for all members of the official opposition-adopt as their basic approach to this problem the theme that essential expenditures must be met out of current revenues, which means by current
The Budget-Mr. Fulton taxes, and that therefore if high taxes are necessary, they must be imposed and will be borne by the Canadian people; but that when we are pressed as we are now-at least with respect to those in the lower income groups- to a point close to the limit of the load we can bear, then we must choose between luxuries and extravagance in government spending or higher taxes. In other words, as to those expenditures that can be eliminated, even though we might in normal times like to have them made, if they can be eliminated without interfering with essential services or construction programs, they must go.
In the light of that main theme, I find two main criticisms of this present budget. The first is that to increase taxes to the extent to which they have been imposed in the budget is unnecessary. It is unnecessary to increase taxes to this point; because the government has failed miserably in attacking this problem of reducing non-essential expenditures with any attitude of determination, and has failed almost completely, having regard to results, with respect to the elimination of unnecessary, unproductive and wasteful expenditures. The result has been that when we continue these expenditures at the present level and are faced with the necessity of increasing expenditures for defence preparedness, taxes are unnecessarily high. The second criticism of the budget is that the tax increases that have been provided are in large part inflationary.
Turning to the first head of this criticism in some detail, I would start with a question: How can this government, and the Minister of Finance (Mr. Abbott), who so readily asks the people of Canada to cut down on their luxuries and on their luxury spending-even taxes the people on what they spend on necessities through sales and excise taxes- how can they have the effrontery to continue at the present level their own enormous expenditures on luxuries and non-essentials? Let us look at some of the totals of government spending.
These totals that I shall give are all exclusive of figures for national defence and defence production. The tables are taken from the table which the Minister of Finance included as a supplement to the estimates which he brought down this year. We find that, leaving out civil salaries and wages and civilian allowances, and excluding national defence and defence production-the figures are taken to the nearest hundred thousand dollars-we have the following totals: Professional and special services for this year, $36,000,000 as against $24 million last year; travel and transportation, $13,900,000, an increase from $13,800,000; freight, express,

The Budget-Mr. Fulton etc., $2,300,000 as against $2,100,000; telephones, telegraphs, etc., $4,800,000, an increase from $4,600,000; printing of reports and publications, $3,900,000 as against $4 million; films, displays, advertising, broadcasting, etc., $4,800,000 as against $5 million; office furnishings, stationery and supplies, $11,200,000 as against $11,500,000; materials and supplies, and this is excluding land and buildings -apparently it is office materials and supplies -$39,400,000 as against $37,600,000, and for postage, $3 million in each year. The total, Mr. Speaker, is $109,900,000 for 1951-52 as against $105,600,000 for the last year. Therefore under nine headings alone we have an increase of $4,300,000 this year as against the estimates for a year ago. We are certainly not doing very well in our economy drive, about which the Minister of Finance has said so much.
I challenge anyone, Mr. Speaker, to show that these items that I have listed are all essential. I challenge anyone to maintain that we need the present level of spending on such items as special and professional services, travelling expenses, office equipment, advertising, publicity and displays. These are luxuries, a good part of which at least could be eliminated. I suggest very strenuously again that when the people are required to reduce their level of spending on what the government calls luxuries, although in many instances necessities are taxed-when people are being required to do that, then government as the first measure must reduce its own spending on these luxury items.
But speaking of challenges-and I said I challenge anyone to show that we need the present level of spending on these headings- I should like to refer to a challenge issued by the Minister of Finance last year in his speech on April 28, 1950. When he was closing the budget debate of that year the Minister of Finance used these words, as found on page 1991 of Hansard for that day. He was referring to the letter that the leader of the opposition (Mr. Drew) had written to him suggesting the setting up of a commission to examine government expenditures in Canada and to suggest ways and means of eliminating waste and duplication. The Minister of Finance said:
In his letter my hon. friend has suggested that there exists in the government service waste, extravagance, duplication of services and the like. I categorically challenge that statement: I categorically deny it. In my judgment there is no duplication, waste and extravagance.
Yet the minister in his budget speech this year, and in his baby budget speech last fall, boasted of saving. He says that he has saved $35 million this year. Well, Mr. Speaker, the


question then is, if there was no waste, extravagance or unnecessary spending, how is he able to save any money at all? The minister has said that these savings which he is making are being made without interfering with efficiency and without impairing any necessary program. He says that he has made some savings, in spite of the previous denial that there was any room for saving, but he has saved only a fraction of what he could save, and his total saving amounts to 1.8 per cent of the ordinary expenditures of the government-that is, apart from defence and defence production-or, as was pointed out earlier by the hon. member for Lake Centre (Mr. Diefenbaker), it amounts to If cents on every dollar that we spend, apart from what we spend on defence.
The parliamentary assistant has repeated the challenge of the Minister of Finance. He repeated it in his speech yesterday, and I am reading now from page 2279 of Hansard:
Early this session I made quite a long speech on this subject.
It is a pity that the results in measures of economy did not equal the length of the parliamentary assistant's speech. He went on to say:
In this house I repeated the challenge to him. I asked for the co-operation of every member of the house in indicating where the savings were to be made . . .
I am glad to take up the challenge of the Minister of Finance and of the parliamentary assistant to suggest concrete savings, although I think we should point out that apparently the parliamentary assistant has not been as observant as he should be, because concrete suggestions have been made in the past. I can only assume that they have been ignored both by the minister and by his assistant.


Mr. Sinclair:: Such as?


Edmund Davie Fulton: Oh, I will come to them later. The parliamentary assistant knows them already, but I will come to them again for him in a little while. Just before doing so I should like to deal with another statement made by the parliamentary assistant in the course of his speech yesterday. He referred to a technique which he described as the technique of the big lie. I am using his words, Mr. Speaker; they are not mine. His words are to be found at page 2281 of Hansard. He suggested that in maintaining that the government is wasteful and extravagant in its spending habits the official opposition was adopting this technique which he so described, and he criticized us for what he alleged to be a failure to be specific. He repeated the unfounded and unjustified statement that no specific suggestions for savings have been made. All this, he said, amounts to the

technique which he described-with an apparently intimate knowledge of how it works-namely the technique of the big lie.


James Sinclair: I have listened to it so often.


Edmund Davie Fulton: Well, you may have listened to it, but you practised it on this occasion rather successfully.


Mr. Riley:: Don't be too hard on him.


Edmund Davie Fulton: I refute absolutely the statements made by the parliamentary assistant so far as his criticisms of the official opposition are concerned. I say-and I will show-that none of his statements is borne out by an examination of the facts. So that in making his false and misleading assertions he has shown himself a master of the technique he was discussing, namely, the technique of the big lie.
If one analyses the facts one will find they show that we are not the only ones who are saying the government is extravagant and wasteful, although yesterday the parliamentary assistant sought to create the impression that everyone else in Canada is satisfied that the government is exercising the maximum economy, and that only the Progressive Conservative party accuses it of being extravagant. We are not the only ones who say the government has failed to reduce expenditures where they could be reduced. I refer to an editorial in one of the leading papers of this country, which has something to say on the point. Referring to the present level of non-essential or non-defence spending, it says:
There will be distinct gain if, in paying the taxes, the public realizes how essential it is that the government should cut down on non-defence spending. Mr. Abbott had a great deal to say about economy, but the government's achievement here was only $35 million out of $2,036 million, virtually total failure.
Then it goes on to say:
The choice is between necessary defence expenditures and an unnecessarily high level of non-defence spending-between the "pursuit of peace" and skyrocketing prices.
That is an editorial which appeared in the Winnipeg Free Press of April 2, 1951,-a paper outstanding in its support for the government over the years-commenting on the budget and estimates for this year. So that the official opposition is not the only one that has been making this type of statement.
Secondly, examination of the facts shows that we have been specific in suggesting places where unnecessary expenditures might be eliminated. That was done last year. I myself did it in the course of the budget debate. It was done also in connection with the estimates last year, when we moved
The Budget-Mr. Fulton a reduction in the amount of an item. Hon. members will recall what happened on that occasion, how it was shown quite clearly that the government is not really interested in making a serious study to see whether or not expenses can be reduced. When we did move such a reduction, the impossibility of effecting savings by that method was demonstrated when the government called in all its members, put the issue to a vote as a matter of want of confidence, and defeated the attempt to reduce the expenditure on the basis of a want of confidence motion.
If the parliamentary assistant will examine the facts, and if he will be fair and honest in the matter, he will realize there have been several occasions-many	occasions-when
specific reductions have been suggested, but have been ignored or defeated by the government.
Thirdly, an examination of the facts will show that the parliamentary assistant is himself a past-master at the technique to which he referred; and so, incidentally, perhaps by association, is the Minister of Finance (Mr. Abbott), in their habit of making, and repeating without foundation, the assertion that no reduction in expenditures can be made. That assertion was made by the minister on a couple of occasions at least last year, both in the spring and in the fall session; and the whole tenor of the speech yesterday by his parliamentary assistant was to the same effect, that the government is not guilty in any degree of extravagant waste or unnecessary expenditure and that the people of Canada know this fact.
But those statements are without foundation. If we look at some of the examples of government spending we can readily see places where savings can be made. First let us look at some of the increases in government expenditures and government service over the years. I have taken some of these figures from a book by Mr. Taylor Cole, in which appears a study he made and published in 1949 under the title "The Canadian Bureaucracy". In this instance, incidentally, the word "bureaucracy" is used in a non-derogatory sense, and simply as a descriptive word for the whole civil service and public employment set-up in the Dominion of Canada. It is a most impartial and excellent study, and one which contains a good deal of interesting and valuable information. When one compares the figures in Mr. Cole's book as to the number of employees in the government service on the various dates he mentions, with the figures for today, it is easy to see to what an unnecessary extent the government service has been expanded.

The Budget-Mr. Fulton
Let us look at the figures for some of the larger departments. These figures show that the Post Office Department in 1946 had 15,256 employees, whereas, according to the estimates for this year, it now has 17,877. I wonder what tremendously increased services are being given by the Post Office Department to justify this increase in staff of over 2,500 in about four years. Then we see that while in 1946 the Department of Veterans Affairs was able to render a satisfactory service with 12,830 employees, in 1951, when one would have thought the rehabilitation program and the settlement of veterans would be well under way and operating smoothly, the department has a staff of 14,295, or an increase of over 1,400.
The Department of Transport in 1943 was able to get along with 6,273 employees- and that, I would point out was at the peak of the war, when vast quantities of supplies, men and munitions were being moved as part of Canada's war effort. Yet in 1951-52 the estimates for that department show that they require a staff of 10,586, or an increase of more than 4,000 over the number they had in the war years.
In 1939, the latest figure given in Mr. Cole's book for this department, the Department of National Revenue operated with 4,415 men. We certainly realize that the government is collecting much more by way of taxation now than it was in 1939, but I do not see that the personnel of that department need have been expanded to the point where it now numbers 14,024. In other words the Department of National Revenue now has a staff more than three times as large as it did in 1939.
Let us look at the unemployment insurance commission, which carries 7,008 employees to administer the unemployment insurance fund. The administrative costs of the unemployment insurance commission for this year alone amount to $23,700,000. That is a most interesting figure. An examination of the estimates shows that the government's contribution for this year to the unemployment insurance fund	is $27,500,000. The
administrative costs, as I have said, are $23,700,000.	These figures	show
that it is costing us practically as much to administer the fund this year as the government is contributing to the fund. It appears therefore that it requires a staff of 7,000 to look after the approximately
200,000	unemployed at the present time. In other words there is one on the staff for each 35 unemployed persons, and the cost of administration almost equals the annual contribution made by the government. I

suggest that not only is that totally unwarranted, but there is very grave danger to the unemployment insurance fund if these high administrative costs continue at their present level.
To turn to a second phase of unnecessary government spending, one should compare the increases in the estimates this year with last year's level of expenditures. Take civil salaries and wages-again these are exclusive of defence and defence production; here we have an increase of $19,500,000. It must be observed in all fairness that there has been a substantial increase this year in the level of wages.


James Sinclair: Ten per cent.


Edmund Davie Fulton: The parliamentary assistant points out that it is ten per cent. I will not make a criticism of that increase, therefore, but simply place it on the record. Then we take civilian allowances, which show an increase this year over last year of $400,000. Professional salaries and special services, about which I shall have something to say a little later, show an increase this year of $2,600,000. Travelling expenses, exclusive of defence and defence production, show an increase of $144,000; freight, express and cartage, an increase of $220,000; telephones, telegrams, etc., $225,000; materials and supplies, $1,800,000.
Looking at those increases alone, we must note that they are increases in ordinary expenditures quite apart from defence and defence production in a year of great stress, and it is surely obvious that a general examination suggests that there is room for economy. Look at some of the specific items which indicate unnecessary expenditure. Let us take the national film board, which shows an amount this year of $2,602,000. Before I proceed I am going to suggest that it is not the primary responsibility of the opposition to do a job which is actually the government's job, that is, to go through the various heads of government expenditure and suggest where reductions can be made; however, the government having thrown out this general and rather meaningless challenge, and the government having failed to make any determined or successful effort to reduce unnecessary and wasteful expenditure, I accept the challenge. It is a pity that it should be left to the opposition to do the government's job, but that being the state of affairs imposed upon us and upon the country by the government, I think the opposition would be failing in its duty to the country if it did not accept the challenge and try to do for the people

the job which the government should be doing for them.


James Sinclair: It was not a challenge; it was a request for co-operation.


Edmund Davie Fulton: It may be said of the items which I am going to mention that they are desirable heads of expenditure; and if we had lots of money, if we could afford them, if taxes were low, then it is true we might be able to indulge in some of these expenditures without objection. But when we have reached the point where we are now, with inflation and with the cost of living crushing people in the lower income groups, I suggest that the government must decide whether we are going to have savings on these items or are going to continue this unproductive, extravagant and wasteful level of present expenditure.
The national film board is a very nice thing to have around if you have lots of money. If we reduce it by half, we would save $1,301,000. Take all other government publicity and we find that if we can reduce the present rate of expenditures by only half we will save a further $3,054,000. Take the matter of printing departmental reports and other publications, another branch of publicity; if we reduced that by half we would save $3,058,000. Take the matter of office stationery and furnishings. Surely to goodness we must be fairly well along the road to completely equipping the government offices we have at the present time. But if we reduced this by only one-third of the amount the government proposes to spend this year we would save $5,853,000.
Take travelling and removal expenditure, amounting to over $36 million. The Department of National Defence shows a considerable increase under this item, but that does not account by any means for the total. If we saved only one-third it would amount to $12,103,000. Take materials and supplies- and here I exclude defence and defence production. Some materials and supplies are necessary; but do we need the elaborate and expensive and continuous and uncontrolled level of expenditure there is on this type of equipment? If we could save only one-sixth of what we are being asked to spend on materials and supplies, again excluding defence and defence production, we would save $6,556,000.	[DOT]
Next is professional and special services, which covers the payments made to special professional and technical employees outside the civil service. If we were to save one-third of this item it would amount to $12 million. The total savings by the modest
The Budget-Mr. Fulton reductions suggested under all these items would amount to $45 million in a year's operations.
If you look at the table which the Minister of Finance has included with this year's estimates you will find that ordinary expenditures, excluding defence and defence production, show increases in twelve categories as against decreases in only ten. If you include defence and defence production you will find there are increases in nineteen categories as against decreases in only three. That certainly does not suggest any very determined economy drive.
Going back to some of the specific items I have mentioned, in case it may be said that it is all very well to take a general list and indicate what might be saved, I intend to look at these in some detail. Take the matter of government publicity. The parliamentary assistant says that we speak about this in general and are not apt to go into detail. I suggest that the purpose of government publicity, if it has any purpose, is to sell legislation, to sell democracy by showing what democracy does, to publicize what parliament does in the legislation which it passes. Its purpose is not to sell ministers and Liberal policies. But that undoubtedly is one of the main tasks of the government publicity bureaux as they are set up in the different departments at the present time.
I repeat that the only justifiable purpose of government publicity is to sell parliament, legislation and democracy; it should not be used to help ministers vie with one another. That being so, the proper way to handle this would be as we handle other government services, by setting up one publicity bureau to centralize and control this work and the expenditures on it. Specific suggestions to this effect have been made on at least two previous occasions. I challenge the parliamentary assistant, the Minister of Finance or anyone else to show that if you did that and gave that bureau just half the present over-all total for government publicity you would not get a much better and more efficient job.
It is perfectly true that this might hurt some of the advertising firms which get the money now, and then take over the election campaign publicity for the Liberal party when the elections come round; but it
would not hurt anybody else. It would provide legitimate government publicity, which is the only type of publicity on which public money should be spent. If further evidence is needed that government publicity has got out of all bounds, I would refer to

The Budget-Mr. Fulton a Canadian Press dispatch which appeared in the Ottawa Journal of April 21 and which reads:
Publishers of 86 Canadian daily newspapers expressed concern over the growing volume of publicity releases from federal government departments.
Handling of these releases was criticized in resolutions adopted unanimously yesterday at the concluding session of the Canadian Daily Newspapers Association annual meeting.
The reason for this unsatisfactory situation, Mr. Speaker, is that these publicity bureaux in the departments appear to be vying with each other to see if they can build up their minister as the next leader of the Liberal party.
Take the question of professional and special services. Without defence and defence production the estimates this year call for an expenditure of $26,676,000, an increase of $2 million over last year. With defence and defence production they call for a total expenditure of $35 million. Why, one may ask, is this huge amount being spent on professional and special services, paid to people outside the civil service when there are approximately 150,000 civil servants available to the government, 150,000 men and women many of whom are highly paid, and the vast majority of whom are extremely able and capable? Why then must we spend $35 million outside the civil service on professional and special services?
I suggest it is because it affords a very ready and pleasant medium of payment, outside the control of the civil service, to friends of the government. After all, we have had some examples of that. The parliamentary assistant yesterday brought into the debate the name of a gentleman who is at the present time a member of the house when he referred to the present Liberal leader for Ontario and said that he was the man upon whom they relied to flatten the present premier of Ontario.


James Sinclair: Hear, hear.


An hon. Member:: What a hope!


Edmund Davie Fulton: Of course, Mr. Speaker, I must say that in the matter of placing that hon. gentleman in a financial position to help him in this job, this government appear to have done the best they possibly could. You will remember that, as revealed in a return made to this house, that hon. member before he was a member of the house received for professional and special services the sum of $172,000 for legal work which he had done for. the Department of Veterans Affairs.


An hon. Member:: In one year.


James Sinclair: Oh, no; not in one year.


Edmund Davie Fulton: In one year and three months. The parliamentary assistant certainly must admit that they made a very good beginning for the hon. gentleman, so far as the financial aspect of the picture is concerned, by that payment for "professional services".


Mr. Speaker:: Order. The hon. member's time has expired.


Stanley Howard Knowles: Proceed.


Some hon. Members:: No.


Edmund Davie Fulton: Mr. Speaker, I feel what I have said has been enough to satisfy any reasonable member that there are very many headings indeed under which government expenditure can be reduced, and many openings of which, if the government is determined and sincere in this matter, they can take advantage to reduce considerably the level of unessential expenditure and thus bring about, a considerable and welcome relief from the burden on the taxpayers of this country.


Mr. Alan Macnaughlon (Mount Royal):: Mr. Speaker, if the times we live in were different, if there was not such a sense of urgency in the air, I would have asked the indulgence of the house while I spoke of the local problems and hopes of my own people, the 55,000 voters who make up the constituency of Montreal Mount Royal. But I know that I speak for my constituents when I say that this is a time for concentration on the broader and more urgent issues which now confront this nation and the world- rather than to dwell on the particular needs of any one local constituency.
My people are aware of what confronts them on the world scene. They are alert. They want to know about many things- the Atlantic pact, the cost of living, our defence program, our foreign commitments and how much they cost, the reasons for higher taxation. They want to know what they get in return for the moral and financial support they give to the system of government under which we all operate, and which costs like blazes in men, in materials and in money. I have tried to answer these questions, and in trying I have found a certain failure on the part of those of us in Ottawa to communicate fully the facts about where we are leading Canadians; about what we are trying to do, to safeguard their interests and to assure them reasonable security for the future, continued prosperity, and freedom.
I venture to embark on such considerations, as a new member representing a new constituency, a constituency which is so representative of all that is Canada today. Election to this house has placed me in the position

of representing a complete Canada in miniature, a nation in itself, with 55,000 voters in twelve municipal districts, and with population ratios very similar to those of Canada as a whole. All income and social groups are represented in much the same proportions as you will find in the national scene. Mount Royal's minorities include Canadians of all racial origins, with all their individual idiosyncrasies. There are the sedate and wealthy residents of the towns of Montreal West, Hampstead and Mount Royal; up and coming St. Laurent with the largest housing development in the British commonwealth,-Norgate; St. Laurent, where two main language groups work side by side vying with each other in their efforts to create a progressive modern community. At other points in the riding you will find residential areas occupied by industrial workers and certain lower income groups.
When I look at the march of industry into Montreal Mount Royal, I sometimes wonder what the good brothers of the oratory of St. Joseph, that shrine perched on the mountainside, what they must think as they gaze over the vast area below. Here a few short years ago they looked upon green fields as far as the eye could see. Now all is vast housing projects, sprawling busy factories, swarming thoroughfares, whole new industries such as aviation, including Canadair, chemical research, foundries, printers, manufacturers, -nine great hospitals, several famous colleges, a myriad of churches and synagogues. Anyone driving through the riding of Mount Royal cannot miss the feeling of urgency, of progress, of modern Canada that underlies this thriving busy expanding segment of our national economy, my constituency. (Translation):
When speaking of my constituency, it is only fitting that I should take advantage of this first opportunity to thank, in their own language, my 18,000 French-speaking electors for the trust they have placed in me.
I assure them of my entire devotion to their interests.
(Text):
In a battle of ideas such as presently engages mankind, a battle for men's minds in effect, the winner will be he who has the best ideas provided he gets his ideas across best, too. In other words, provided he can communicate his ideas to the people. It is essential, tremendously essential, that our leaders do not withdraw, do not separate themselves from the people. Rather, they must make extraordinary efforts to explain the why and the wherefore of their actions and policies. They must communicate with the people. Can we honestly say that we are winning the war of ideas? Are we con-
The Budget-Mr. Macnaughton centrating enough upon communicating our concepts, our needs, our urgencies to those who look to us for leadership? My experience is that we are not.
Since the beginning of this session the government, with very commendable speed and refreshing frankness, has presented policies of great importance to this house. The thorny "manpower problem" was raised and answered with the greatest honesty by the Prime Minister (Mr. St. Laurent). A detailed report on "foreign affairs" was made by the minister in charge. An expensive but integrated plan for "national defence" was presented and "stand-by emergency powers" enacted. The creation of a department of "defence production" is now a fact. It is ready to carry out the strengthening and expansion of a whole range of activities that support the defence effort. For unmobilized resources, however vast they may be, do not win wars. And now, the "budget." There is no doubt that the plans and policies of the government have been carefully thought out and carefully presented to this house.
But do the Canadian people understand and appreciate fully the reasons for these great plans-these plans which will almost certainly bring about economic, political and social changes in our normal way of life; these plans which may stay with us for years to come? Is the government doing enough to communicate the purpose and ideas behind the plans of these top-level decisions? While the country is aware in general terms that the world situation is very bad indeed, people do not know in detail what their own part should be. They have just been told firmly what they must do without, but they still, I submit with due respect, do not know in detail why.
Are we sufficiently informed as to the scope and limits of state planning? It is not enough to talk about emergencies without explaining them fully to the people. The question of communication is vitally important, because without public support for government policies the best-laid plans will fail. The Canadian people are not sufficiently informed of the intentions behind each aspect of government policy. Owing to this lack of general understanding, a whole series of questions is being asked throughout the country. The very variety of those questions points to the fact that the people do not see the end objectives of all this planning and regulation.
Many are disturbed in the first place, thinking that only lip service is given to responsible government. Some have even gone so far as to call it caucus or cabinet government. What guarantee is there that these emergency powers will not continue indefinitely? What of this creeping inflation which seems to be spreading, reducing the

The Budget-Mr. Macnaughton value of the dollar, slashing the value of accumulated savings, eating up the value of investments and discouraging personal savings and thrift? What of the mounting high cost of living, and the misery and hardship that result as a consequence? What of price control? What of the social services, old age pensions and security generally? What of the forty-plus age group, and those of sixty and over? What about the rights of labour under the new defence productive effort, and for that matter the rights of capital? Are the legitimate returns from efficient management and the investment of capital, which are so much needed for the expansion of our industry and development of our resources, to be denied? Surely we are now agreed that an excess profits tax, to quote the words of the Minister of Finance "blunts the edge of efficiency and invites waste."
What we are looking for is a way to tax excessive profits. But this whole matter has become so involved in misinformation it is almost an "excess-politics tax". What is to be the plight of that body of hardworking, intelligent, honest and generally thrifty people, caught between organized labour on one side and organized capital on the other side, and battered generally by a rising cost of living? Have we nothing to say to them? Have we no surcease to offer?
All of us in this House of Commons know that considerable thought is given to these problems. We know some of the answers. We know that a federal old age pension security scheme has been offered to the provinces, and is now under consideration by them. We know that the problem of small businessmen and the question of how small industry can be integrated in the over-all defence effort is receiving close attention. We know that procedure, looking to the channelling of defence production information to potential subcontractors, is being set up, and that the proper allocation of materials and military orders is being studied. We know that in the face of national danger the Canadian way is to gather round the government table and pool our ideas, resources and energies.
But do the people know this? Controls which are arbitrarily imposed and seem unreasonable meet public apathy and evasion. But if they are explained I submit the people will accept them with good grace. Even more, if Canadians are informed of the necessary objectives, they will themselves find ways in which to aid the government, and their initiative will often lead them to the objective faster than regulation can do it. This, then, is a plea for interpretation.


There is certainly one aspect of our national scene which, more than any other, needs interpretation at this moment. I refer to the high cost of living. It touches everyone. It concerns the people more than anything else. We are encountering a dangerous cycle of rising costs and rising prices. The housewife, who today has to spend 170 cents for what cost her 100 cents a few years ago, is obsessed with the difficulty of making ends meet on the average wage earner's income. One of the first things this government, and this whole parliament, might do is address itself to the defence of the buying power of the wage earner's dollar. Perhaps it is an exaggeration, but most of us will agree that we feel a fair wage today is twice what we are getting, and a fair price is half what we want to pay. Right or wrong, that is the way we secretly feel-that is all of us who have not the true facts by which to judge.
We know that taxes must be levied to maintain responsible government, and that taxes inevitably become interwoven in the price system. Possibly there is in the field of price determination some room for wider examination. The mark-up on sheer physical cost is one thing, but the mark-up on taxes included in the price structure savours of pyramiding and hence gouging the public. Thus, for example, if a new tax on a unit is one dollar, and if the mark-up on that dollar is another 35 cents, it savours of profiteering, pure and simple. I do not complain about the physical costs entering into an article, but I do think the government should step into the mark-up field and insist on fair play for producer and consumer.
We are all anxious to end this rising tide of prices, and it is the duty of the government to take whatever reasonable measures it can in an attempt to stabilize prices. It seems to me that, as a result of the Korean war, many prices have been deliberately increased in expectation of ultimate price control. This effort to establish a high price level is, to a considerable degree, responsible for rising costs. Unless this sort of thing can be avoided, price control may become a measure of last resort, and we shall bring on ourselves an economic strait-jacket. The Minister of Finance is entitled to our thanks for the sincere attempt which has been made to stop the rising cycle of prices. But if parliament cannot find something effective, then we are in for a great period of unrest.
In an issue as vital as inflation, policy must be right. But before we can halt the apparent deterioration of the purchasing power of the dollar in our pockets, we have to explain why it must be halted. Our failure to do so is perhaps the one really weak link in our

otherwise strong defence chain. I agree wholeheartedly with the remarks of the Minister of Trade and Commerce (Mr. Howe) when he said in this house, as reported at page 1762 of Hansard for April 9:
The greatest contribution any Canadian can make to stop inflation is to avoid panicky buying and to produce as much as possible. All of us should be thinking in terms of working harder; of working longer hours, rather than shorter hours. There is too much of a tendency, it seems to me, for people to look to government for solutions to their problems. Governments can help and should help in dealing with inflation; but consumers, labour unions, farm organizations, and businessmen can do much by their own efforts to reduce the pressures that lead to higher prices.
Even the Montreal Gazette of Tuesday, April 17, in its leading editorial under the heading "Home-made Inflation" said in part:
But it is also true that a high percentage of inflation is home-made, and is very definitely a domestic product.
And it is largely a domestic product because Canadians seem to have made up their minds that they want more leisure for more money. Or if they do work longer hours, they expect a large premium for the effort.
It might seem strange that this young country, reputed to be so full of vigour, should see fit to choose this leisurely way of living, for which so large a price must be paid in the depreciation of money values. But there is a growing favour for the mistaken belief that it is still possible to earn more without producing more.
Farther down the article reads:
As Mr. Abbott pointed out in his budget address: "If we are to carry greatly increased defence costs without having a definite fall in our standards of consumption . . . we shall all have to work harder and longer."
In plain terms, Mr. Speaker, the national pie is only so big. If one pressure group succeeds in carving out for itself a larger piece than it is entitled to, then the rest of us will suffer. That is what has been happening to us, and the only way for us to get out of the mess is for all of us to concentrate on increasing the size of the pie so that we all get a bigger piece. The need for hard work and the importance of curbing our appetites must be continually reiterated if we are to lick inflation.
When orders such as "credit restrictions" and others of like nature are made, whether as a result of suggestions from the Department of Finance, the Bank of Canada or otherwise, then it becomes the obligation of the government to explain them and to see to it that the explanation is understood, right down to the grass roots of the nation.
Most people are having considerable difficulty in understanding just what credit regulations mean; and I maintain that if the government wants the co-operation of all the sensible Canadians in this country, then they must go out and explain down to the last 80709-149
The Budget-Mr. Macnaughton detail, and give the very good reasons, the high purposes and serious objectives which induced credit restriction.
It is not good enough for some bureaucrat to wave a wand in Ottawa and expect that Miss Millennium will arrive on the next train from Utopia. To succeed, government policy must have the full co-operation of the people; but that co-operation will not be forthcoming until the people fully understand what is the end objective of that policy. In fact, it is the government's duty to the nation to make sure that all policies are fully understood-not only those in such vital issues as inflation, but those in all matters affecting parliament and the public. None of this is to say that the government is not doing a great deal better in this regard than many other governments. Such comments as I have made are in the hope only of further improving our lines of communication.
Today the government not only has the duty of formulating policy and seeing that it is carried out by an efficient bureaucracy, but the results of its own bureaux of research and investigation must also be made public and brought to the attention of the citizens at large. Hence, there is a great need, in fact an obligation, on the part of this or any other Canadian government to supply factual, unbiased and non-partisan information. Anything which lessens the vitality of this essential communication between the people and the government would appear to be opposed to the public interest.
This house will be disposed to give credit where it is due to the ministers for their comprehensive statements on broad policy. Yet if there is still such uneasiness in the country, further remedy must be sought. The place of parliament in the lines of communication between government and country is recognized; and it need not be emphasized here, of all places, that it is in part through hon. members themselves, in their addresses and personal meetings in their constituencies, that government policy reaches the grass roots. Accordingly, we receive a great deal of information; our desks groan under the deluge of reports and schemes. If we had more leisure most of us could boil down the spate of information on government activity and policy and use it to show our constituents just what the policy of the government was intended to be.
But lacking leisure, we need summaries and analyses; we need brief human statements of the intentions behind such and such a measure, couched in terms of the individual; then we in turn can go to our constituents. It is here, I think, that some criticism may be levelled against government
2328	HOUSE OF
The Budget-Mr. Macnaughton departments, bearing in mind always that the capacity to make a succinct human statement is a gift capriciously bestowed or laboriously learned. It is lucidity we want today, not diffused brilliance. Given the tools of communications, most of us would use them effectively.
Now let us glance at other channels of communication open to the government; and a study should be made of whether they are being enlisted to the best advantage of the nation. As everybody knows, these channels are the daily, the periodical and the weekly press, the radio, eventually television, moving pictures, the advertising industries and also the publishing industry. Who will deny that these avenues for information are the largest and most effective in the country? It is most important that government information should always be available to these great groups.
First, of course, is the press. Here our prime contact is with the press gallery. This house and the gallery are like next door neighbours. We know a great deal about each other, and a common prudence sometimes checks our tongues. It is not very often that we here acknowledge the essential function of the press gallery in our system of government. All in all, the sense of responsibility of gallery correspondents is very high. While they may be hired in a private interest, they traditionally and rightly look upon themselves as servants of the public interest.
Meantime, all is not well so far as the volume of information emanating from Ottawa is concerned. The press relies much upon the big wire services. I am told that Canada's main news services have been forced to make adjustments which appear, at first sight at any rate, to amount to drastic curtailment. Thus, at a time of world crisis, the average Ottawa news coverage by the leading agency has been reduced from 8,000 words daily to 4,000, and the United Kingdom bureau has been sharply depleted. I cannot help but feel that the United Nations and Washington should have more full-time press representatives from Canada. The present number is incredibly small.
Do the hon. members in this house, or do the people, know that the estimated cost to Canada of participation in the "United Nations and specialized agencies" for the fiscal year 1950-51 will amount to more than $15 million? If we are justified in spending this amount of money, is it not important that the people should know what their representatives are saying and doing? How can we hope to have public support for Canadian foreign policy when we are not getting a balanced report, as seen through Canadian


eyes, and prepared especially for Canadian consumption? As so many of the problems of Canada come from our efforts to meet a menacing international situation, international news, reported by Canadians for Canadian consumption, is very much our concern.
At a time when world affairs are in such a jittery state I would have thought it essential that the United Kingdom, the centre of commonwealth activities, Washington, the centre of North American and Pacific activities, and Lake Success, the centre of world activities, should have a great many more accredited Canadian correspondents reporting the news for the Canadian public. There are one or two outstanding exceptions to this general statement. The job being done by the correspondent of the Montreal Star at Lake Success proves what could and should be done.
It is encouraging to see that, although news coverage has fallen off badly in spots, the news coverage of the C.B.C. continues to hold its high standard and C.B.C. foreign representation appears to be healthily on the increase. The great success of the domestic Monday night C.B.C. program, where the correspondents quiz the ministers, is further evidence of the general public's need for information on, and its avid interest in, how the affairs of this country are being run and why.
In passing, a compliment is due also to another official agency partially in the news field. I refer to the reconstituted national film board. This board, by the high acceptability of its films and by the large number of its outlets, is doing a national communication service worthy of recognition. But I wonder how many know that the film board's movies are seen regularly in some 3,300 Canadian communities. Film board men are bringing useful films, information and advice on using them to workers in every field of Canadian life.
Another important medium of communication is the field of public relations. Are we doing a job in this field? No one will accuse the Department of National Health and Welfare of hiding its light under a bushel, nor should they do so because their work is both instructional and educational. But how many persons realize that in the last two years, through the initiative of the department, the federal government has been responsible for the construction of 27,000 new hospital beds, many of them in my own constituency, in a total of 40,000? I doubt if the people of this country realize the revolution which has been brought about, nationally speaking, in national health and public welfare owing to the initiative and research policies of the department.

Will anyone deny that the Department of National Revenue is certainly in need of public relations men to explain why the painful process of collecting taxes is so necessary to the just operation of our system?
Let me give you another illustration. I doubt very much whether the people of Montreal and district know how much the federal government, acting through the Central Mortgage and Housing Corporation, has done to assist housing in the greater Montreal area. I have been a constant critic of this corporation. I think its powers are too large and I think it should be brought under closer parliamentary supervision. But in fairness I must say that, upon inquiry, I find that "in the three years 1948-49-50 a total of
38.600	new housing units were completed in Montreal. Of this total, 14,500 were built with government assistance under the terms of the National Housing Act while another
1.600	units were built on direct government account for rental to veterans. Therefore over 42 per cent of all new housing units completed in Montreal in the past three years were constructed with government financial assistance or were built on direct government account."
"In dollar value the total amount of loans approved for Montreal under the National Housing Act in the past three years was $130 million while the total for the province of Quebec was $163 million. Direct government expenditure on new housing for veterans in the same period in Montreal totals $9 million."
And so it goes. The illustrations are legion and the wealth of information which should be brought to the attention of the citizens of Canada is almost comparable to the iron ore deposits in Labrador or the copper and silver deposits in the Yukon. All these little items of so-called local concern, small in themselves, but joined together, go to show the people of Canada that their money is being well spent. They create a feeling of justice and fair play and belief in our system of government. They prove that our government is not some colossus remote from the people, but is a collection of devoted, hard-working individuals, trying to do their best for the country.
One huge information service is to be avoided in the interest of an efficient operation. Inevitably it would become a natural target for partisan political attack and would be forced to operate constantly in a non-stable climate. I believe that the departments themselves should retain their information services in the interest of maximum efficiency. What we need is a traffic manager as it were, somebody to sift the available information 80709-149J
24. 1951
The Budget-Mr. Macnaughton and arrange for it to be disseminated, someone who would be responsible directly to the cabinet. He should have a small staff of recognized competence and the salaries scale available to his office should be such as to make this possible.
His functions and responsibility under the cabinet would be, first, to review all statements on a national policy level, thus making possible the uniform expression through a variety of spokesmen. This is the highest level of federal information.	Second, he
should counsel and guide the various departments and agencies on information policies, techniques and needs. Third, he should have an over-all responsibility to investigate and suggest the elimination of duplication in the various information services.	He should
conduct an annual survey of these operations and require periodic reports from them. Fourth, he should provide liaison with the several communication groups. An important function would be to sound out, seek and secure the active co-operation of existing private agencies, and in so far as possible, without government expense. Most of us recall the great service rendered to this nation during the war by private associations, professional groups and industry and it is reasonable to assume that they would co-operate fully in current non-partisan information programs for the general benefit of the nation. In this way also, we would avoid duplicating functions already performed by existing private organizations. Fifth, he should make public a yearly review of the information service as an additional aid and safeguard. Our traffic manager might be assisted by a non-partisan public relations advisory group chosen from recognized leaders in the field to serve without remuneration and to be available to the information manager for professional counsel. This suggestion is primarily a managing device to supply some measure of order in the present information service chaos and to establish standards of efficiency and economy.
Statements of national policy should be cleared through the office of our traffic manager but functional operations should remain in the departments where they can be most efficient. Under the general guidance of our traffic manager each department under the authority of its chief should undertake a survey of present information functions and practices with the purpose of eliminating waste, overlapping, duplication of activities, unnecessary publications and press releases. For the test should be public need. Once the basic survey has been made it should be kept current by less extensive surveys on a yearly basis.

The Budget-Mr. Green
Extraordinary efforts are made by the great corporations of Canada to keep the public informed of their activities and to be prepared to answer questions. The government of the country is by far the greatest business in it. Judged by the public relations efforts of big business the government lags behind. Clearly the government must not use the taxpayer's money to do propaganda for itself and try to perpetuate itself in office, but it is entitled to say what it is trying to do. Indeed, I contend that it fails in its duty if it does not.


Mr. Howard C. Green (Vancouver-Guadra):: Mr. Speaker, the speech just delivered by the hon. member for Mount Royal (Mr. Macnaughton) has been very interesting and thought provoking. However, I am somewhat surprised and disappointed that he has reached the conclusion that the only thing wrong with the present government is its propaganda machine. Apparently he believes that it should have more and bigger propaganda.


James Sinclair: We are too modest.


Mr. Abbott:: Hiding our light under a bushel.


Howard Charles Green: I am afraid the facts are that the one activity in which they are superb is that of getting out propaganda.


Mr. Fraser:: Too liberal.


Howard Charles Green: To come to my own views on budget policy, may I say that there are, in my opinion, and I think the opinion will be shared by most members in the house today, two vital problems facing the Canadian people and the Canadian parliament in this year, 1951. The first problem is preventing a third world war, and the second is halting the rise in the cost of living and preventing runaway inflation.
The budget must be considered in the light of its effect on these two great problems. In a free country perhaps the must effective way a government can deal with any problem is by framing budget policy to meet that particular problem. So today let us consider whether the Canadian Minister of Finance in 1951 has submitted to parliament a budget plan which meets these two problems as directly and as effectively as they could be met. To put it in another way, is the Canadian government giving leadership, or is its policy one of drift at a time when leadership is needed as never before?
To deal first with the question of the budget and the problem of preventing a third world war, it is true that the minister's budget provides a very large sum for defence expenditures. The figure will be found at

page 1806 of Hansard, and it is $1,664 million out of an estimated expenditure for the fiscal year from April 1, 1951, to March 31, 1952, of approximately $3,700 million. This expenditure for defence purposes is an increase of $893 million over similar expenditures in the fiscal year which has just ended, but of course a portion of that increase is caused by the rising prices. But I should like to point out to you, Mr. Speaker, and to hon. members, the minister's own summary of budget policy, as it is set out at page 1807 of Hansard. This is the key, in my opinion, to his whole budget policy for this year, where he says:
I am reluctant to believe that we must inevitably face budgets of $4 billion or more for any considerable succession of years. There is still a possibility that reasonable solutions of the present international tensions may be developed. In another year's time we should have a clear view of the prospects. I have, therefore, decided not to recommend any major reconstruction of our tax system this year but instead to meet our current requirements by a series of simple but adequate surcharges on several existing taxes and also to widen the coverage of our special excise taxes. I think that over the shorter run-
And those are significant words, "the shorter run".
-this method of defence surcharges will produce the necessary revenue with the least difficulty and inconvenience.
Those words, too, are significant-"with the least difficulty and inconvenience".
If our optimistic hopes are realized it will be easy to reduce these surcharges or to drop them entirely, but I want to add that if it becomes clear that we are in for a long pull at these high levels of expenditure some major changes in the existing tax structure may have to be devised. My tax proposals, therefore, must be regarded as an interim policy for the period of the current year.
That paragraph merits careful analysis. It implies that the problem of preventing a third world war may vanish overnight. It also implies that international tension may be solved at any time, certainly during the coming fiscal year. Unfortunately there is nothing whatever to justify this attitude. I wish with all my heart that there were, but there is absolutely nothing in the world situation today to justify that attitude by the Canadian Minister of Finance (Mr. Abbott). He is lulling the people of Canada to sleep; he is soothing them at a time when they should be aroused.
Furthermore the statements in this paragraph contain the admission that there is need for major changes in the tax structure of Canada, if we are in for a long pull. This forces us to consider whether or not we are in for a long pull. The minister has decided we are not, and he adopts deliberately a short-run plan. What is

that plan? In effect it is to get the extra money with the least difficulty and inconvenience, not to the taxpayer but to the tax collector. The main way of getting it is by a surcharge on existing taxes, and widening the coverage of certain excise taxes. This 1951 budget is a tax collector's budget.
A further implication from the minister's speech is that a year from now perhaps- and there is nothing definite about it- Canadians will get a long-term budget policy which, I submit, is what they should have had this year. Here, clearly, is a policy of drift, not of leadership. Here we have a complete failure to realize the situation of Canada and her allies.
You see, Mr. Speaker, the policy of the free nations of the world today is quickly to become so strong that the Soviets dare not start a third world war. The policy is not only to become strong quickly, but also to continue strong until Russia decides that it is in her interests to co-operate.
Every party in the house approves of this policy. I believe every party in Canada, except the communist party, approves of it: it is the Canadian policy. It is new for us, just as it is new for the Americans. Our experience in two world wars was that we were thrown into them practically overnight, and concentrated all our energies on winning. Then when peace came, when the fighting stopped, we disbanded our forces and returned to our civilian occupations just as quickly as possible.
Today we are faced with an entirely different problem which is that, while at peace, we must become strong enough to win a war, and must continue in that condition. I believe the policy Canada and other free nations have embarked upon is a very difficult one, more difficult even than a full-out war policy. It is perfectly clear we must be strong and prepared all the time until the policy of the free nations succeeds. And remember, if and when that policy fails, we are right in the middle of a third world war.
Obviously this is not a short-run policy; it is a long-term policy. It cannot possibly succeed in one year or in two years. Even if the war in Korea were to end tomorrow- and we know how little likelihood there is of its ending for a long time, in the light of press dispatches of the last day or two- that would not finish the policy of being strong. The defence expenditures would still go on; we would still have to be prepared to defend our way of life.
The war in Korea is merely one attempt to prevent a third world war. Even when
The Budget-Mr. Green the war in Korea is won, that does not terminate the need for the policy of being strong. I hold in my hand the report of a question and answer interview of General George C. Marshall, Secretary of Defense of the United States. This appears in U.S. News and World Report for April 13, 1951. Incidentally I would point out that General Marshall is one of the greatest leaders of our generation; I do not believe his wisdom can be questioned by anyone. In this article, which bears the heading "Prepare For Ten Years of Tension", General Marshall was asked many questions, of which I shall quote only one:
Question: Do you consider, then, that what people have got to do is to bear in mind the over-all picture constantly instead of some little lessening of tension in Korea or perhaps some other part of the world?
Answer:	Put it this way; the best we can hope
for, as I see it, is a prolonged tension rather than an all-out war. What we hope and pray for at the present time is that, as between the two, it might be a prolonged tension rather than war, during which we can build up our strength and our resources, get organized in western Europe, which General Eisenhower, supreme commander in Europe, is trying to do-get straightened out, we hope, in the Far East-but that's the best hope at present. If we should get a complete agreement with the Soviets we would be perfect fools to relax our military strength until we had evidence of good faith.
Unfortunately, the tendency already is to relax.
The reference there is to the United States.
That's what we have to fight against.
Further on he states that he believes the free nations are in for a period of ten years of tension. Canadians were entitled to have a long-term budget policy, but instead they have been told by the Minister of Finance to wait a year. That is bound to bewilder them and cause apathy; it is bound to bring about a failure to realize that the problem of preventing a third world war is a long-term one.
We have here once more a policy of drift and indecision, just as we have a policy of drift and indecision about raising a force for Europe. In the speech from the throne we found these words:
Progress has been made in the organization of an integrated force in Europe under the North Atlantic treaty organization. The supreme commander. General Eisenhower, has recently visited Canada to consult with the government and the chiefs of staff. You will be asked early in the session to authorize Canadian participation in this integrated force as part of our program for national defence and security.
The session has now been going on for practically three months but we have not yet had any statement as to when this force is to be sent to Europe. There are no troops available to send. It is perfectly clear that the men who were raised for the special force

The Budget-Mr. Green will be needed to reinforce the brigade which has gone to Korea. The preparation of forces for Europe will take months. Yet the Prime Minister (Mr. St. Laurent) has said that 1951 is the dangerous year; that this is the year in which we must make a great effort if we are to prevent a third world war.
There is also drift and indecision about establishing an effective reserve army. We rely in Canada for defence from hostile aircraft on reserve anti-aircraft units. The city of Ottawa depends upon a reserve unit to defend it from hostile air attacks, as does my home city of Vancouver. In both cases those units have iust skeleton forces, totally and completely unable to defend their respective cities. If we are to raise any large numbers of troops we must do it by means of the reserve army. Although this session has gone on for three months we have had no statement yet from the Minister of National Defence (Mr. Claxton) as to how he proposes to raise a reserve army. He carefully refrained from dealing with that subject when he spoke earlier in the session and nothing has been said about it since by him.
We have a policy of drift and indecision too in connection with Canada taking part in a Pacific defence pact. The other day the President of the United States announced that there was to be a Pacific pact between the United States, Australia and New Zealand. When we questioned the minister of external affairs about Canada's part he said that the pact was only for the western Pacific. Apparently the government is not interested in such a plan.
Let me point out that if this policy of being strong is to succeed it must be extended to cover the Pacific area as well as the Atlantic. There is not much use stopping a war in the Atlantic if a first-class war can break out in the Pacific. Although Canada is a nation on the Pacific and has several thousand troops now crossing that great ocean to take part in the Korean war, she is not participating in this new defence pact for the Pacific. I think it is a disgrace.
Furthermore, there are two other examples of drift and indecision on the part of this government, one being the failure to crack down on profiteering. Not one move has been made to check profiteering, and very little has been done to halt rising prices. These are just examples of the indecision and drift of the government. The fact of the matter is that this government is so firmly entrenched and has such a large and meek majority that the ministers have become smug and self-satisfied. They have neither the
(Mr. Green.]

will nor the vision to work out a long-term budget policy. So much for the budget and the prevention of a third world war.
I come now to my second question, that
is,	the cost of living and inflation. Certainly this is a vital problem. Since the outbreak of war in Korea Canadians have seen some interesting and disturbing things happen. First of all, they have seen prices and the cost of living rise steadily. I have here a clipping which sums up these increasing prices very neatly. It is a dispatch from Edmonton dated April 10 and quotes Hon. W. C. Woodward, a former lieutenant governor of British Columbia, who I think is as good a merchant as this country ever produced. This reads:
Woodward (Yes) Urges Stop Buying
Edmonton, April 10-(CP)-The way to bring prices down is for people to stop buying, Honourable W. C. Woodward of Vancouver, president of Woodward Stores Limited, said Monday in an interview.
"That may be a surprising statement for a merchant but that's the way I feel about it. There is no reason for these high prices."
Canadians have seen their government threatening to put on controls, but not doing
it.	Surely the government either should have put on controls at once or made a definite statement that there were to be no controls. Instead they said that they would not put them on now but might put them on a little later if the people were not good. The result was that right down the line from the manufacturer to the retailer prices have gone up in an effort to be prepared for the time controls are brought in. There has been unfair profit making across this country since the outbreak of war in Korea. Just two weeks ago a Gallup poll was held in which this question was asked: Do you think there is much profiteering (unfair profit making) going on in Canada now? Three out of every four persons who answered that question said that they thought the Canadian people were the victims of unfair profiteering. I think it could be more fairly described as unfair profit making. There is no doubt that that has been going on and unfortunately the ministry must accept a large share of the blame for what has happened because of their indecision in dealing with the question of controls.
There are other startling things the Canadian people have seen in this intervening period. They have seen the value of their government bonds drop below par although it was understood throughout the country that that would never be allowed to happen. They have seen the value of their savings and their insurance cut drastically. Pensioners of all kinds are being squeezed, unions are being forced to demand increased wages, and

white-collar workers once again are trapped and helpless to meet the situation. It seems to me that there has been an utter failure on the part of the members of the Canadian cabinet to realize the tragic suffering there has been throughout the country. Private members of the Liberal party realize that condition because we have heard them raise it on the floor of the house time and again, but I do not believe that members of the cabinet yet realize the suffering there has been, and which is still going on today.
We were told that the budget would meet the problem of the increasing cost of living and inflation. Everyone expected budget measures designed for this purpose. Instead what have we got? We have a slapping on of extra taxes of the type which are most easily collected, obviously with no definite policy in mind to halt the rise in the cost of living or to prevent the spread of inflation. In fact in some ways the budget is actually forcing the spread of inflation, throwing oil on a fire which is already burning much too briskly in Canada.
I have several criticisms to make of the budget. First of all may I refer to the increase in the sales tax from 8 per cent to 10 per cent which is an increase of 25 per cent in the tax itself. As hon. members know, the sales tax is imposed at the manufacturer's level. It pyramids of course. At each turnover there is a profit mark-up, and that mark-up includes a mark-up on the tax. It hits the poor harder than the rich. The sales tax takes no account of ability to pay. There is no exemption for lower incomes as in the case of the income tax. It is bound to increase the cost of living, and it is directly inflationary. I have very good authority for the statement that the sales tax is inflationary, no less an authority than the Minister of Finance himself. When he delivered his baby budget speech on September 7 of last year he said, as reported at page 423 of Hansard:
In selecting the particular measures to recommend to the house we have tried to take no action that would cause any significant increase in the costs of the day-to-day essential items of consumer expenditure. For this reason I do not propose any change in either the rate or the application of the general sales tax . . .
He did go on to say that the sales tax was not as bad as it was pictured, but there was his definite policy just six or seven months ago.


Douglas Charles Abbott: That has nothing to do with inflation.


Howard Charles Green: Let us read again what he said. It is as follows:
In selecting the particular measures to recommend to the house we have tried to take no action that
The Budget-Mr. Green would cause any significant increase in the costs of the day-to-day essential items of consumer expenditure.


Douglas Charles Abbott: What has that to do with inflation?


Howard Charles Green: It has a great deal. It is because of the increasing prices that we are getting inflation.


Douglas Charles Abbott: I think my hon. friend is confusing cause and effect.


Howard Charles Green: The minister is confusing the hard time the people are having with government policy. Today there is amazement across the country at the reversal of the attitude of the Minister of Finance in the short period of six months. I believe that the criticism of the increase in the sales tax is universal; it is in practically every leading paper in Canada regardless of political allegiance. I suggest to the minister that it is not yet too late to drop the increase in the sales tax. To do so would probably start a movement of prices downward. Nothing would do more to raise the morale of the Canadian people, and their attitude is of the first importance in fighting the battle against inflation. Probably there is nothing the government could do which would go farther toward solving the problem than to change its mind and cut out the increase in the sales tax.
I realize that the result would be a loss of $105 million estimated revenue for the present fiscal year, but the minister is budgeting for a surplus of $30 million. Government revenues are buoyant and will continue so because defence preparations are bound to continue. The minister has consistently underestimated his surpluses. In the baby budget speech of September of last year, when he had only six months of the year left, he estimated a surplus of $15 million. As things turned out, he had a surplus of $203 million, almost thirteen times the amount of his estimate. He certainly is not a very good estimator. There is no need for a surplus under present conditions.


Mr. Macdonnell (Greenwood):: Probably he does it deliberately.


Howard Charles Green: As the hon. member for Greenwood (Mr. Macdonnell) says, it may be that he does this pessimistic estimating deliberately.


Douglas Charles Abbott: No, that is not true.


Gordon Knapman Fraser: He cannot figure figures.


Howard Charles Green: Perhaps he cannot figure. That may be the answer.

The Budget-Mr. Green


Douglas Charles Abbott: That may be the answer, yes. I have always felt that prophecy was diffioolt.


Howard Charles Green: If it turns out that there is a
prospect of a deficit of $75 million or a lesser sum, then expenditures can be cut further than contemplated during the present year. I cannot think of a stronger incentive for saving by the government.
The question of saving brings me to my next criticism of the minister'si taxation policy. There is absolutely no incentive in the budget to the individual to save, and savings by Canadians could do a great deal to halt price increases and prevent inflation. The fact is that people have simply been unable to save because of rising prices. When the minister dealt with that question, as reported at page 1799 of Hansard, he did a bit of whining. He said:
Personal spending increased more than personal incomes, resulting in a decline in net personal savings out of current income. This decline in new savings amounted to about $270 million, or a drop of about 30 per cent.
Then he went on to point out the need for saving. He made a great plea to the Canadian people to do more saving. Where they were to get the money for saving he did not explain. At page 1803 we find these words:
There is also urgent need for a higher volume of new saving, to cover the increase in capital investment which is in prospect, and to restrain the rising trend in consumer spending. This is certainly one of the best ways of reducing the intensity of competition for the use of labour and materials, and so reducing the upward pressure on prices.
Then he went on to say:
The money saved can be used to buy Canada savings bonds, or to pay off the mortgage on his house or farm more rapidly, or to speed up the repayment of other debts, or to increase his savings in any other form that suits his individual circumstances. The important thing is to achieve an increase in aggregate savings up to a level at least equal to the new capital investment which we shall have to make this year.
One would have thought there would be contained in the budget policy some incentive to the people to save, but there is nothing whatever. In fact, the budget makes savings practically impossible. Mr. Speaker, inflationary conditions abroad in the world today call for a reward for saving. I thought the position was made very clear by Mr. James Muir, the president of the Royal Bank, in his annual statement to the shareholders in January of this year. Mr. Muir is quoted as saying:
The most powerful weapon in the fight against inflation is generally supposed to be a stiff increase in the income tax. But the test of efficiency must be that any income tax increases shall penalize spending and reward saving.

He explains that further by saying:
. . . equity and efficiency alike demand the exemption from income tax, wherever possible, of the bona fide saving of the public. In its simplest form, this might include the limited exemption of insurance premiums and of net purchases of savings bonds over the year.
With inflationary conditions today, increased insurance is a necessity for all family men. Mortgage payments have been assumed by our young couples that would have terrified my generation. When we see them taking on mortgages of $8,000 or $10,000, all these tremendously high figures, we wonder how on earth they are ever going to be able to pay them off. The time has come when there should be some budget policy designed to reward these young couples, and anyone else, who will save for purposes such as paying off a mortgage or purchasing a reasonable amount of insurance. This is one instance where a long-term budget policy would have been of great benefit.
My third criticism of taxation policy is directed against the levying of the 15 per cent excise tax on necessities, particularly stoves and washing machines. The tax is not being imposed on stoves using wood or coal. If a person happens to use electricity, gas, or oil for cooking, then the tax is payable on a stove of that type. I think it would have been wiser for the minister to exempt stoves of all kinds up to a certain value. Then, if people wanted to buy more expensive stoves, let them pay the excise tax. You see, you cannot turn the clock back and force everyone to use a coal or wood stove. I am told that in greater Vancouver there are over 86,000 homes using gas, electricity or oil, and 40,000 using all other kinds of fuel. To put a tax on these electric, oil and gas stoves as well as ordinary washing machines is merely increasing the cost of living. I believe that should not have been done.
This brings me to the fourth point. The minister could have made up any loss by increasing the tax on liquor. There has been no increase in the tax on liquor, although everyone in the country who drinks expected -I do not happen to be one of those people, but certainly all my drinking associates in the house expected-that there would be an increase in the tax on liquor. There would have been very little protest. The minister gives as his reason that liquor is already highly taxed. He proceeded to tax cigarettes and tobacco to the tune of $35 million a year. It is amusing to read his statement of last year in introducing the baby budget.


Mr. Mayhew:: Have you any vices that we could tax?


Stanley Howard Knowles: Don't answer, or they will do it.


Howard Charles Green: I am afraid that the government can tax anything, so I am not going to answer that question. The minister's statement regarding liquor and tobacco taxes last September 7, is found at page 423 of Hansard. He said he was increasing the tax on liquor last September, and then went on to say:
I am not proposing any changes in tobacco taxes, which are already very high.
So we had the same reason last year about tobacco that we are getting now about liquor. I thought last year that he was bringing the liquor tax up to the level of the tobacco tax. Liquor certainly should have been hit in this present budget before cigarettes and tobacco, but instead liquor has been protected. Unfortunately, that leads to talk across the country that the liquor interests have the ear of the government, and rumours of this sort. It is a bad thing to get opinions of that sort abroad.


Douglas Charles Abbott: I am sure the public do not believe that.


Howard Charles Green: The minister might be surprised how many of the public do believe it. The minister made a great mistake in not increasing the tax on liquor.
Finally, on this problem of the cost of living and inflation, I believe that the house and the Canadian people should protest the proposal of the government to amend the British North America Act so that the provinces can levy an indirect tax on sales up to three per cent. That proposal has been set out, of course, in the appendices to Hansard. This would enable the provinces not only to levy direct taxes, as they can do at the present time, but also to levy indirect taxes. This is the price the provinces are demanding for paying 50 per cent of the old age pension of $40 per month for the aged from sixty-five to sixty-nine inclusive. What will that tax mean? It is certain to force prices up, certain to spread inflation. It will make it that much harder for our senior citizens to live. I do not know how they get along now on $40 per month. The real need today is for an increase in that basic payment of $40.
The provinces are not directly concerned with the fight against inflation. They are not very likely to worry a great deal about inflation. I am sure the minister has found that because he complained about them at page 1803 of Hansard, of April 10, 1951, and pointed out how much expenditures by 80709-150
The Budget-Mr. Pouliot provincial governments had been increased. He went on to say this:
Having regard to the impact of defence on construction materials and skills I must again urge the provinces and municipalities to review particularly their capital and construction programs in the light of the general public interest.
This is to be a hidden tax. The provinces will not have to disclose it to the people who buy. Of course, that is the very worst kind of tax possible. It certainly will not bring down the cost of living or curb inflation. I suggest that it would be far better for the dominion to set up a contributory pension scheme under which Canadians would pay as they earn, and then draw benefits as of right at sixty-five without a means test, and let the provinces add to the figure if they wish to do so.
In conclusion, Mr. Speaker, may I say that there is little that is inspiring in the budget policy. Once again the government has lost an opportunity to give leadership to the Canadian people-to give them a clear view either of the challenge which faces Canada or of the ways to meet that challenge successfully. Yet all the time the communists drive on relentlessly toward their goal of world domination. They are not working on any year-to-year basis. I suggest that the government should realize, before it is too late, that these two terrible problems which are faced by the Canadian people and, of course, by the Canadian parliament, can only be solved by aggressive leadership.


Mr. Jean Francois Pouliot (Temiscouata):: Mr. Speaker, it is an honour for me to speak following the hon. member for Vancouver-Quadra (Mr. Green). I have known him for a long time. He is one of the popular members of the house. He always prepares his speeches with great care. By the way, may I say that he was one of the members of the civil service committee some years ago, when I came to know him well. Since then we have been good friends.


Howard Charles Green: We had a happy time on that committee.


Jean-François Pouliot: We had a great time together. My hon. friend was one of the most helpful members of the committee.
I regret, Mr. Speaker, that I am obliged to disagree to a certain extent with my hon. friend. He spoke about young couples who assumed mortgages amounting to $8,000 or $10,000, and he said that they must have great confidence in the future. Indeed, they must; and they are right to be confident in th,e future. Probably the reason why they assumed such heavy responsibilities is that
233$

The Budget-Mr. Pouliot they had never heard any of the depressing speeches made by my hon. friend. If they had, they would not assume such responsibilities in connection with a home.


An hon. Member:: They would not get married.


Jean-François Pouliot: Perhaps not. Perhaps if they took my hon. friend seriously, they would wait a long time before saying the final "yes". I am fond of the hon. gentleman; but as we are in an era of fundamental freedoms, when the fundamental freedoms or human rights are talked about so much, we may differ. He spoke of the policy of drift and indecision followed by the government and quoted a speech made by the Minister of Finance (Mr. Abbott) last year. He referred to some statements that were made by him at the time. Until then the policy of the government had been different, and the government had not embarked upon a three-year policy for spending $5 billion for defence preparations. I am sure that policy was undertaken partly on the advice of my friend the hon. member for Vancouver-Quadra contained in the forceful speech he made last June in answer to mine with regard to the Korean affair. When 1 protested against the expedition to Korea, I remember that my friend the hon. member for Vancouver-Quadra, the hon. member for Lake Centre (Mr. Diefenbaker) and a new member from Quebec said that I was all wrong, that we should defeat the communists on their own territory in Korea, that Canada should send a large expedition there and that we should have armies in all parts of the world. That has been the policy of the hon. gentleman for a long time.


Howard Charles Green: My hon. friend is stretching that quite far.


Jean-François Pouliot: No. Even today my hon. friend complained that the expeditionary force to Europe is not ready, although thousands of our boys have been sent to Korea. I prefer what was said the other day by the financial critic of the opposition, the hon. member for Greenwood (Mr. Macdonnell). I heard him well, and I was satisfied to hear him express such a view as the one he then expressed, not because he repeated what I had said but because he showed some courage in saying it. He said that it was the view of many people in Toronto that the troops we have in Korea should be brought back to this country. But I will not pursue the matter further. I will however tell my friend the hon. member for Vancouver-Quadra that from the start he has been speaking like General Crerar and General MacArthur.


Howard Charles Green: I am in good company.


Jean-François Pouliot: When they hear of war, these gentlemen are like hounds at hunting time and they think of pursuing the enemy. I think a great deal of hounds; some of them are splendid and are extremely helpful in hunting game. But in this instance I say to the hon. member for Vancouver-Quadra- and I say the same thing to my other gifted friend, the hon. member for Lake Centre- that in the language he used in the house he has spoken like General Crerar and General MacArthur: We must defeat the enemy at all costs. It costs money. Here you are. You cannot complain about it.


Howard Charles Green: It costs a great deal more if the enemy defeats us.


Jean-François Pouliot: Perhaps. But I do not speak of the budget of China or that of Korea. I speak of the budget of Canada. Both my friend the hon. member for Quadra and the hon. member for Lake Centre, and some others on the other side of the house, have been insistently declaring that we were not doing enough, that we should do more and more; and here we are. We are spending more money, and that money must come from the pocket of the Canadian taxpayer. The result cannot be otherwise. The last men who can be heard to complain about the increase in taxation are my hon. friend and all those who have insisted on these military achievements. I am not a pacifist; but at the time this policy was embarked on I was afraid of precisely what my hon. friend is complaining of now; but he has been insisting on it all the time.
We have a North Atlantic pact. He must be satisfied with it inasmuch as he did not say much about it, except that we are not fulfilling our duty, that we are not sending troops now to Europe under General Eisenhower. This is what he said, and I heard him very well. He accused the government of following a policy of drift and indecision because they have not enough men to send there. It costs money to send more men there. It may be in the three-year defence plan, but it will cost more money, and it will entail taxation. My hon. friend is too bright a lawyer and too able a politician not to realize that fact. He must be the first one to realize it. I would say that he and my other gifted friend, the hon. member for Lake Centre, must realize it.


Howard Charles Green: It is in the defence expenditures.


Jean-François Pouliot: Yes, it is in the defence expenditures; but it can be done only at the proper time. If my hon. friend insists on doing more, the Canadian people will have to pay more,

and they will have to tighten their belts accordingly. My hon. friend knows it. I do not expect to convince him, because I know he is sincere and that he has very deep feelings about it, and I respect his views. Although I sincerely believe in the freedom of thought in this house about political problems, 1 have the right to disagree with it, and moreover I have the right to tell him that he is illogical, and that he should praise the government for taxing the Canadian people for the expenditure that he has been calling for. Instead of accusing the government of indecision and drift, telling them that they have not yet established a policy on that, he should say to the government: I congratulate you on defending this country, on sending troops to Korea, and I hope that you will soon send that expeditionary force to Europe. But I have never prepared the speeches of the hon. gentleman and I am sure that he will not use my suggestions for his next speech.
He spoke of the reserve army. We have a reserve army in this country. He complained that we have a small number of reserve aircraft and anti-aircraft reserves.


Howard Charles Green: Anti-aircraft.


Jean-François Pouliot: Yes. If we had sent no expedition to Korea our reserve would be much stronger. My hon. friend must remember that during the war I insisted on mobile units. He did not speak about it today. He must remember that at the present time in a country the size of ours, with more than three thousand miles of land between two oceans, the best defence is the air force. He knows that. The air force has made tremendous progress here in Canada, and it is still progressing all the time under the able direction of the Minister of National Defence (Mr. Claxton) and of the intelligent brass hats. They are not all bright, but some of them are. My hon. friend will admit it and that is defence.


Howard Charles Green: I always thought they were bright.


Jean-François Pouliot: He should have congratulated the government on the progress that has been made by the R.C.A.F. since those days when we heard about emergency measures to be taken.
He said that there was no statement from the Minister of National Defence about the increase of the reserve. Let him wait for the estimates, and the minister will come with his estimates in the near future, and he will give all the required information to the hon. gentleman; but he is hard to satisfy, and I wonder whether the explanations that will be 80709-150J
The Budget-Mr. Pouliot given to the hon. member for Vancouver-Quadra by the minister will be found satisfactory by the hon. member. But, sir, I am an optimist; I hope so.
What was it the hon. gentleman said about the Pacific pact? He wants a new defence pact, but unfortunately he did not explain with what countries we should unite in the Pacific. We already have close association with the United States, and there is Mexico south of the United States. What else is there on the western side-


Howard Charles Green: Australia, New Zealand and the United States are to be in this pact.


Jean-François Pouliot: Yes, but my hon. friend knows that that pact is in the making and it is not completed yet. According to dispatches which have been published widely in the press, some dominions in the Antipodes are not so strongly in favour of the pact. I did not telephone to the legations of the dominions to know what was the view of the governments concerned, but I read it in the press.
I have heard my hon. friend say four or five times that Canada should sign a Pacific defence pact. With whom? With Japan? We have no peace treaty yet with Japan. The treaty is in the making. With Chiang Kai-shek or with the Chinese communists? It would be pretty difficult to sign it with the communists. And then, who else? The Philippines? They are under United States domination. Oh, well, my hon. friend knows about that.


Howard Charles Green: They are an independent
country.


Jean-François Pouliot: Yes, so it is, but we know what it is. We know Mr. Romulo, and we know the Philippines. Would my hon. friend be satisfied to have the Philippines in the Pacific pact? Canada and the United States are already united; we are allies. We would have what? Japan? Is he ready to admit Japan now?


Howard Charles Green: Australia and New Zealand.


Jean-François Pouliot: It is not certain that they will accept.


Howard Charles Green: Oh, yes.


Jean-François Pouliot: That is the point. My hon. friend says "yes", but he has not read the papers recently.


Howard Charles Green: Yes, I have.


Jean-François Pouliot: Yes, but he needs only to look at the press and he would not be so sure as that. We could go hand in hand to the high commissioners of Australia and New Zealand and ask them about the views of

The Budget-Mr. Pouliot their governments, and my hon. friend would be surprised at their answers. But perhaps they would say: We are diplomats; we do not tell the secrets of state to Canadian members of parliament.
Would my hon. friend include Japan in the Pacific pact? Would he take Chiang Kai-shek and the Chinese nationalists?


James Sinclair: No answer.


Jean-François Pouliot: And France for Indo-China, or Viet Minh or Viet Nam?


James Sinclair: No answer.


Jean-François Pouliot: It is a very difficult matter. There are of course the beautiful south sea islands with luxurious vegetation, fruit, dances and all the charm of life. Well, they are not yet in the picture, but if my hon. friend wishes to take a trip there I will go with him, and I will ask those people if they are ready to join in the Pacific pact? But there is nothing I enjoy so much, Mr. Speaker, as to see a beaming expression on my hon. friend's face. It took me a long time to make him smile, but now that I have succeeded I am proud of myself, and I consider that it is quite an achievement. Well, sir, we will go together to the south sea islands and-


Howard Charles Green: Hear, hear.


Jean-François Pouliot: We will participate in a debate before these people, and we will ask them if they want to join a Pacific pact, and if they do, it will be unanimous.


Stanley Howard Knowles: Bon voyage!


Jean-François Pouliot: We will take the hon. member with us.


James Sinclair: Take him along, too; it would speed up the session a lot.


Jean-François Pouliot: I am more serious than my hon. friend may think when I mention these facts. At the present a Pacific pact is impossible. Would my hon. friend cross the earth to Australia, to the Antipodes, to Australia and New Zealand in case of an emergency? It is the end of the world for us; and they have not yet decided to come in. China is a huge power; we are not officially at war with them. But they are supporting the communists whom we are now fighting in Korea. They are outside the pact. Now Japan can be admitted to the pact, but only-and my hon. friend will realize this-only after the country is officially recognized and a treaty is duly signed with them. That treaty is not yet signed, and my hon. friend knows it. What is the use of speaking about that?
When I think of the seriousness of the situation, and the ability of the hon. member,

and realize that he knows the story, I conclude it is because he is like MacArthur and Crerar and Lake Centre-they want to fight; they want to fight the world.
Then he said there had been no halt to profiteering. It was an observation punctuated by no other argument. He just mentioned it, and mentioned things he said were taken for granted. This time he just mentioned the fact, and did not insist upon it. Perhaps there is some profiteering or, as he says, some profit making. But the denial of profits is the old socialist theory we heard explained in the house by Mr. Woodsworth and his associates a long time ago. I agree with the hon. member that profiteering is wrong.
The other day I listened to an excellent speech by the hon. member for Lake Centre. I told him it was one of the best he had ever delivered in the house. What is his suggestion about that matter? The suggestions offered are very few.


James Sinclair: More money to Colombo.


Jean-François Pouliot: Yes, more money to Colombo; human rights and fundamental freedoms!


James Sinclair: More money for that, too.


Jean-François Pouliot: Yes, yes-because there are many people who are interested in the defence of human rights and fundamental freedoms-with the exception of the hon. member, of course, who receives only his parliamentary indemnity. Those people are much better paid than we are to pronounce those words, ad infinitum. They are well cared for.
Then, I made note of one sentence in the hon. member's speech, which, to me, was a jewel-but a false jewel.


James Sinclair: Paste.


Jean-François Pouliot: The hon. member said that the ministers have become smug and selfsatisfied. I see here the Minister of Finance (Mr. Abbott) and the Minister of Public Works (Mr. Fournier).


Howard Charles Green: All the ministers.


Jean-François Pouliot: Yes, all of them. But the two
I have mentioned are two members of the cabinet who are now in the house. I ask you, Mr. Speaker, to look at the Minister of Finance and the Minister of Public Works and to say whether they are smug and selfsatisfied. They may be self-satisfied, because they advertise good politics. But "smug" they have never been. My hon. friend should know his native tongue better than to use that word when referring to gentlemen who are so informal, so human and so easy of

access as those gentlemen, who are members of the cabinet. And I say that of their parliamentary assistants, too.


Howard Charles Green: You will be in the Senate, if you don't look out.


Edmund Davie Fulton: He will be director of the bureau of publicity.


Jean-François Pouliot: He has not yet been named and may never be.


Gordon Knapman Fraser: They want it reorganized.


Jean-François Pouliot: What the hon. member wanted was a long-range budget policy-meaning by that more taxation. And what does he mean by long-range? He spoke of ten years of tension, advertised by General Marshall. I agree that General Marshall is a great man. Does he mean that in the life of the country ten years is long-range? Surely it is not that.
Then the hon. member said that since Korea disturbing things had happened, that prices had risen, and that we have no price controls. Well, I will ask the hon. member two questions: First, is the hon. member, who represents an important constituency in the great city of Vancouver, ready to support the control of wages?


An hon. Member:: No answer.


Jean-François Pouliot: Answer?


Mr. Dickey:: No answer.


An hon. Member:: Silence.


Alfred Johnson Brooks: Are you?


Jean-François Pouliot: Now, that being answered satisfactorily-


Some hon. Members:: Oh, oh.


Jean-François Pouliot: -I will ask another question of the hon. member.


Howard Charles Green: Write them all down; there are so many I cannot remember them.


Jean-François Pouliot: Oh, there was only one.


Howard Charles Green: Put them on the order paper.


Jean-François Pouliot: No; it was a simple question. There was nothing complicated about it. I know that my hon. friend wants clear situations and I will ask clear questions.


James Sinclair: Yes, or no.


Jean-François Pouliot: No, he may answer with frills, if he wishes. I would be greatly enthused if I were to have an answer.
Then, the first question, which was so ably and so pointedly answered, was: Is the hon. member in favour of the control of wages? I would repeat that question to the constituency of Vancouver-Quadra, and say that their distinguished member of parliament has said in the House of Commons that he
The Budget-Mr. Pouliot is in favour of the control of their wages. I should add that he has not said it; I have added that.


James Sinclair: Lost his tongue.


Jean-François Pouliot: Is he in favour of lower wages?
Then, having spoken about low things, lower wages, I shall now speak about higher things and ask the hon. member if he is in favour of controls at the top price. This is a simple question, you will understand.


Howard Charles Green: From a simple man.


James Sinclair: And to a simple man.


Howard Charles Green: Yes, to a simple man, also.


Jean-François Pouliot: Well, "from a simple man'' and "to a simple man" was not an answer to my question. But I see the hon. member has not lost his voice, and that he is able to answer me.
Now, having got his well-expressed views about the control of wages I would like him to tell us if he is in favour of establishing controls, with prices at the top?


An hon. Member:: No answer.


Jean-François Pouliot: And I see that his second answer is just as conclusive as his first one.
Now, Mr. Speaker, when young people who want to get married listen to speeches of the hon. member for Vancouver-Quadra I want to be there to try to lessen the depressing effect of his speeches, and to remind those young people that Canada is a great country, and that there must be no doubt about it.
Another thing my hon. friend said solemnly-and he seemed very much worried about it-was that Canadian bonds had fallen below par. He was very much concerned about that. I am sure that like everyone the hon. member has at times visited brokers' offices or bucket shops and has seen how things are done there. He knows that when Canadian bonds are sold they are sold at a premium, and he knows that when they are redeemed they are redeemed at par. In the meantime there are fluctuations in the market price of a point or two or perhaps only a fraction of a point. Anyone who reads the market page in the press will realize that my hon. friend was not as serious about this as he usually is about other matters.
Then he referred to the increase in the sales tax and he became quite persuasive in asking the minister to drop this increase. I have never been enthusiastic about the sales tax, but on the other hand I realize that the government has been listening to the recommendations of the hon. gentleman to spend a lot for defence and so on.


James Sinclair: The Pacific pact.

The Budget-Mr. Pouliot Mr. Pouliot: The Pacific pact. It is unfortunate, but we must pay for these things. The hon. member referred to the surplus as being thirteen times larger than what the minister expected. The reason is obvious. Perhaps because of the emergency, but in any event the businessmen of this country showed great activity and the increased business created this surplus. This is a simple explanation by a simple man to an hon. gentleman who is well versed in economics.
He says that the budget makes savings impossible. Savings are always possible. I admit that we have not got all that we wanted from the government. My hon. friend did not get his Pacific pact or the sending of Canadian troops to Europe. He may get both of those things in due course. There are other matters that have not been settled, but, which I hope will be soon, like pensions for the old and so on. These will cost money. If the old people and the blind are receiving only $40 instead of a larger amount it is because of the insistent demands by the hon. member for Vancouver-Quadra, the hon. member for Lake Centre, and an hon. member from Quebec that we go to war. We have to pay for all this.
The hon. member quoted Mr. Muir, president of the Royal Bank, who wrote a very nice article which was sent to all of us. I .read it with interest and profit. The hon. member should read not only speeches by Mr. Muir; he should also read the reports of the annual meetings of all the chartered banks and the large insurance companies. I am sure he will enjoy them very much.
I shall not say anything more because I have covered the ground to a large extent. I am not familiar with shorthand, but I did take some notes and I have answered some of the points that were raised. I am glad the hon. member is still in such a good mood and I hope we will remain friends. Let me tell him that in times like this it is a good1 thing to have an experienced pilot at the head of the government. With due respect to his chief, the leader of the opposition (Mr. Drew), for whom I have great regard, I am sure that all parties are ready to trust the Prime Minister and his cabinet in the difficult circumstances with which we are faced.
If my hon. friend considers the matter as objectively as I am sure he can, he will realize that the problems before the government are tremendous. I do not think any members of the government are smug. I see the Minister of Labour (Mr. Gregg) who is neither smug nor self-satisfied. I can say that of all members of the cabinet. They are

just good Canadians who are trying to do their best to serve their country. They are trying to help the constituents of my hon. friend, my constituents and the constituents of any other member.
If my hon. friend uses his talents for the better and offers constructive criticism he knows not how much it will be appreciated by his own constituents. I am sure if he had complimented the Minister of Finance upon the budget he would have received thousands of letters from his constituents saying, "All right, Howard, go on, you are on the right road". He would be on the right road to a political conversion.


Mr. E. G. Hansell (Macleod):: Mr. Speaker, I had hoped that the hon. member for Temiscouata (Mr. Pouliot) would go on for another five or six minutes, as I was enjoying him, as I always do. I have great respect for my hon. friend, as he has for everybody. He proceeded to give the hon. member a dressing-down. Since there are one or two functions during the dinner hour I wonder if you would mind calling it six o'clock.


Some hon. Members:: Agreed.


Some hon. Members:: No.


The Acting Speaker (Mr. Beaudoin):: Hon. members will realize that it is not up to the Speaker to declare whether it is six o'clock. Not having unanimous consent, I cannot declare it six o'clock.


Ernest George Hansell: I noticed the other night that when the chief government whip did not want a vote he asked the house to adjourn at a quarter to eleven. I can go on if I must, but it means that there will be a three-hour break from six to nine o'clock before I can continue my speech. I can talk along this line for another six minutes if necessary.


Mr. Fournier (Hull):: Personally I have no objection, but not long ago we asked for the same favour and were turned down by a member of that party.


The Acting Speaker (Mr. Beaudoin):: Is it the
pleasure of the house that I call it six o'clock?


Some hon. Members:: Agreed.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock. PRIVATE BILLS

[Stage Direction]
The house resumed consideration in committee of Bill No. 117, to incorporate Cana-
[Stage Direction]
dian-Montana Pipe Line Company-Mr. Bennett-Mr. Dion in the chair.
Sections 1 and 2 agreed to.
On section 3-Capital stock.
Mr. Cruickshank:: Mr. Chairman, I think
this is the clause in which I am particularly interested. The last time I spoke on this particular bill I desired certain information in which I know the people of my riding are interested, I would even go further and say in which the whole of British Columbia is interested. As a matter of fact, Mr. Chairman, I did not think it would be necessary for me to say anything on this particular section, because I am sure there are some of my colleagues in British Columbia who are interested in gas and pipe lines just as I am. The main reason, Mr. Chairman, for my interest in this particular bill is that I want to tie it in with the whole gas and oil picture in Canada. It is true that this particular bill more or less concerns what we might call a branch line, but on the other hand it is a main line. That may not sound particularly clear, being a branch line and yet a main line, but on the other hand the gas situation is so vital, not only to our province but to the whole Dominion of Canada, we must look at the whole picture and not merely make it a sectional issue.
I do not want to weary the committee, Mr. Chairman, but possibly you are not as familiar with the argument I commenced so I had better reiterate what I said. As a matter of fact, I thought one of the Alberta members might discuss this bill. I understand that some of the Alberta members are not at all in accord with the policy of their government in connection with the distribution of gas.


Mr. Prudham:: Speak for the province of
British Columbia.


George Alexander Cruickshank: The minister says to
speak for the province of British Columbia. I am glad to note that at least the minister has committed himself and is interested in the gas situation in his native province, an excellent province. I am surprised the minister has not spoken before in this house to explain what a magnificent province it is, the potential wealth of the province and how it could thus be developed, not only to build up his province into an even greater province blit also to build the rest of Canada. I believe I have won the minister over to my side, that the building of Alberta will also build up Canada, in spite of the government that they have in Alberta-for instance the member for Red Deer (Mr. Shaw), I am sure, does not agree with the policy adopted
24, 1951	2341
Canadian-Montana Pipe Line Company out there in connection with the distribution of this great wealth that they have. This wealth, Mr. Chairman, is not merely the wealth of Alberta, but it is also a part of the great heritage of this great dominion of ours.


Louis-René Beaudoin: Perhaps I should
inform the hon. member that we are now discussing section 3, and he should make his remarks relevant to the item.


George Alexander Cruickshank: Mr. Chairman, I shall
try to confine myself to the section.


Louis-René Beaudoin: Perhaps I should
read the section to the hon. member. It reads:
The capital stock of the company shall consist of five hundred thousand shares without nominal or par value.


George Alexander Cruickshank: I am glad that you
brought that to my attention, Mr. Chairman. It was the very point, I am sure, the minister from Alberta had in mind. This is the very section for which I was looking. It is section 3 in Bill L-l of the Senate of Canada, an act to incorporate Canadian-Montana Pipe Line Company. Under "Capital Stock" it says that it shall consist of 500,000 shares without nominal or par value. This is the very section to which I was referring, Mr. Chairman. That is of value and importance to more than the province of Alberta, a great province, although I am sure the hon. member for Red Deer will agree with me that it is not as well administered as it should be. Now that I have the support of the hon. member for Red Deer and the minister from that province on this very section, it enables me to clarify the argument I intend to advance at greater length.
I do not want to weary the house on this particular bill, and certainly not on this section, but when we are going to share the wealth we have in this great dominion and this province with our great neighbour to the south, we must have a certain amount of protection. As I understand it, and I shall be glad to be corrected, Mr. Chairman, if I am wrong, the desire of this particular company in securing a charter-charters, by the way, should be very valuable things and given careful consideration in this chamber-is to export gas to the Anaconda Copper Company. I understand the original intention was to export for a limited period to more or less tide the company over an emergent situation as a defence measure. Incidentally that company, in conjunction with ours, is doing wonderful work in preparing for any eventuality in defence. They require this gas for that purpose. Originally, I understand, they wanted this fuel for a period of five years. I am not a member of
2342	HOUSE OF
Canadian-Montana Pipe Line Company the committee but I understand from evidence given before the committee that it has now developed they want it for a twenty-five year period. The sponsor of the bill can correct me if I am wrong. I am quoting the evidence of the president of the company, Mr. Corette, I believe his name is, as to the twenty-five year minimum. As I understand it, under that particular section of the charter this could be extended to the lifetime of the gas supply, and that is all the more reason why a great deal of attention should be given to this section 3, the amount of the capital stock of the company. If gas from our great province is to be exported indefinitely to the United States, there must be safeguards, safeguards not only for Alberta and British Columbia, but, under this very section, safeguards for the whole Dominion of Canada.
The other day I was speaking-certainly this comes under section 3, Mr. Chairman- of those who are financing the company. We have not had the privilege of having that explained to us. Who is financing it? I want to know where these funds are coming from, Mr. Chairman. Surely, the question of funds comes under the heading of "Capital Stock." I asked where these funds were coming from. Were they to buy these shares of the capital stock? Were those stocks to be disposed of in Canada or in the United States? I asked how they were to be payable, whether in Canadian or in United States funds. These are some of the questions I asked in connection with this particular bill. Surely it is in order, Mr. Chairman, to ask who are going to build this particular pipe line, and if they have had experience in this particular form of work. When we have an issue of stock to that extent, surely we should have information as to why we are to issue stock to that extent and to indicate that the people who are issuing it have the capital behind them to the extent of 500,000 shares without nominal or par value. We should have that information. As I said, we should know where they are getting the funds, what the terms are, and the experience they have had in spending these funds. Then there is the matter of whether steel is available. The other night we were informed by one of the ministers that the steel was available. Of course I have no doubt that that is correct, and that the steel is available. Those of us who have not been privileged-


Louis-René Beaudoin: Order. What the hon. member is saying does not relate to the clause under discussion which concerns the capital stock of the company. I will ask
[Mr. Cruickshank.l

the hon. member again to relate his remarks to the clause under discussion.


George Alexander Cruickshank: Very well, Mr. Chairman. I will just ask one or two questions in connection with this particular section; then possibly I could confine the rest of my remarks to one of the other sections. In order that the sponsor of the bill will answer me on this particular section, I should like to have it on record that, with respect to the capital stock consisting of 500,000 shares, without nominal or par value, I would1 require to know where that stock is to be disposed of. Then as you say, Mr. Chairman, it would probably be far more in order if I confine my remarks to the following section.


Louis-René Beaudoin: Shall the clause carry?


Mr. Shaw:: Before it carries, may I say to the hon. member for Fraser Valley that certain of his early remarks were predicated upon one of the most fantastic suppositions that I have ever heard, namely, that I am in disagreement with the oil and gas policy of the government of the province of Alberta. However, I shall not go beyond saying that just at this point because I fear that I would be completely out of order.


George Alexander Cruickshank: I accept the apology, Mr. Chairman.


An hon. Member:: Whose apology?


Some hon. Members:: Carried.


Mr. Bennett:: There are three companies interested in this pipe line: the Union Oil Company, the Montana Power Company and the McColl-Frontenac Oil Company of Canada which is well-known in our country. These three companies are large and substantial organizations. The preliminary financing for this pipe line is being undertaken by the Montana Power Company which has been in the public utilities field for about seventy years. Any additional moneys which may be required will be financed by these three companies. I think that answers the question asked by the hon. member for Fraser Valley.


George Alexander Cruickshank: That answers that question, Mr. Chairman. There is more to follow.


[Stage Direction]
Section agreed to.
On section 4-Head office and other offices.
Howard Charles Green: I believe an amendment to clause 4 was moved in committee, Mr. Chairman. Will you please tell us what that amendment is and whether it is now included in that paragraph.


Louis-René Beaudoin: As I see it here, the amendment was to subsection 2 of clauge 4 which now reads as follows:
The company may, by by-law, change the place within Canada where the head office of the company is to be situate.


George Alexander Cruickshank: No, that is not it.


Louis-René Beaudoin: That is the only amendment I see.


Howard Charles Green: The words "within Canada" are added. Is that the change?


Louis-René Beaudoin: Yes. The words "within Canada" are the two words by which subsection 2 was amended.


Mr. McCulloch:: In clause 3 I think there was an amendment to the effect that $10 was to be the par value of the stock.


Louis-René Beaudoin: I cannot agree with the remarks made by the hon. member for Pictou, because clause 3 is not amended according to the bill I have here.


Howard Charles Green: I think perhaps what the hon. member has in mind, Mr. Chairman, is that a resolution was passed providing that for purpose of payment of fees, these shares would be considered to be of a certain par value. I do not believe there was an amendment to this section itself.


Henry Byron McCulloch: I think the hon. member for Vancouver-Quadra is right.


[Stage Direction]
Section agreed to.
Section 5 agreed to.
On section 6-Powers of company.
Howard Charles Green: I believe there was an amendment to clause 6. Would you read us the terms of it, Mr. Chairman?


Louis-René Beaudoin: The amendment applies to line 30, which now reads as follows:
. . . and other gaseous or liquid hydrocarbons provided that the main pipe line or lines of this company either for the transmission or transportation of gas or oil, shall be located entirely within Canada.
Shall the clause as amended carry?


Mr. Sinnoit:: With regard to clause 6, may I say that a few days ago I had an opportunity of saying a few words on this pipe line bill. At that time I said that I believed that we should here in the House of Commons support an all-Canadian pipe line. As I see it, this clause says:
The company, subject to the provisions of any general legislation which is enacted by parliament, relating to pipe lines for the transmission and transportation of gas and oil or any liquid product or by-product thereof, may
Canadian-Montana Pipe Line Company
(a) within the provinces of Alberta and British Columbia or outside Canada construct, purchase, lease, or otherwise acquire, and hold, develop, operate, maintain, control, lease, mortgage, create liens upon, sell, convey or otherwise dispose of and turn to account any and all interprovincial and/or international pipe lines, for the transmission and transportation of gas and oil including pumping stations, terminals, storage tanks or reservoirs and all works relative thereto for use in connection with the said pipe lines; and buy, or otherwise acquire, sell, distribute or otherwise dispose of gas; and as an adjunct or correlate to pipe lines for gas to have similar powers and facilities for pipe lines for the transmission and transportation of oil and the acquisition and disposal of oil; and own, lease, sell, operate and maintain aircraft and aerodromes for the purpose of its undertaking, together with the facilities required for the operation of such aircraft and aerodromes; and own, lease, operate and maintain interstation telephone, teletype and telegraph communication systems and, subject to the Radio Act, 1938, and any other statute relating to radio, own, lease, operate and maintain interstation radio communication facilities;
That is paragraph (a).


Stanley Howard Knowles: What bill was the hon.
member reading from?


John Sylvester Aloysius Sinnott: This is Bill N-l of the Senate.


Stanley Howard Knowles: I am sorry; the hon. member is reading from the wrong bill.


John Sylvester Aloysius Sinnott: The section that I was reading is identical with the section in the bill which is before the committee.


Stanley Howard Knowles: The hon. member has been reading clause 6 (a) of Bill N-l, to incorporate Border Pipeline Corporation, which is not identical with clause 6 (a) of Bill L-l which is before the committee at the present time, although it has the same import. I am merely drawing attention to the fact that the hon. member was reading from the wrong bill.


George Alexander Cruickshank: It is the same general legislation.


Louis-René Beaudoin: I imagine the hon. member will have to wait until the other bill comes before the committee. Shall the clause carry?


John Sylvester Aloysius Sinnott: No, it shall not carry. Section 6 (a) is exactly the same as the one which 1 have just read. It reads:
The company, subject to the provisions of any general legislation relating to pipe lines-
Do you want me to go over it again?


Some hon. Members:: Dispense.


John Sylvester Aloysius Sinnott: I appreciate the help of the hon. member for Winnipeg North Centre, and admit that he was on the bit so far as the bill is concerned. I was reading from section 6 of Bill L-l, which is identical with what I was talking about. At the present
2344	HOUSE OF
Canadian-Montana Pipe Line Company time the people of Canada own vast quantities of oil and natural gas. The sponsors of this bill would export that natural product from this country. In other words, they would permit those who come into the country and invest a few dollars to take away our natural resources and leave the people of this country penniless. That is something that I, and the hon. member for Fraser Valley, will not stand for. We believe that the natural resources of Canada should be developed for the people of Canada before any of those resources are exported to anyone else. If we maintain that principle in this parliament then we will not allow anyone outside this House of Commons to have anything to do with the bill which is before us at the present time.
This is something which is vital, to every Canadian. Unless we endeavour to expand our facilities ar.d develop the natural resources of this country, Canada will never be any more than it is today. Therefore I say, Mr. Speaker, that before any gas or oil is exported or taken to any United States point such as Superior, Wisconsin-it would have been much better if the pipe line had ended at Fort William-before any gas or oil is taken any place outside Canada the needs of Canada should be satisfied. That should be done before any part of the United States or any place else has the benefits of those facilities.


Louis-René Beaudoin: Order. The hon. member will realize that this clause dees not relate to exportation. Section 6 concerns the powers of the company. The sidenote reads:
Power to construct and operate pipe lines; power to hold land.
And everything is within Canada. It does not say anything about exporting outside the country.


Alphonse Fournier: Carried.


John Sylvester Aloysius Sinnott: It does not say "within or without Canada"?


Louis-René Beaudoin: There has been an amendment to subsection (a), line 28. Therefore, it reads:
. . . provided that the main pipe line or lines either for the transmission or transportation of gas or oil shall be located entirely within Canada.
Shall the clause carry?


John Sylvester Aloysius Sinnott: No. Section 6, paragraph (a) of Bill L.l reads:
Within the province of Alberta and/or internationally outside Canada construct, purchase, lease, or otherwise, acquire and hold-


Alphonse Fournier: That has been
amended.


John Sylvester Aloysius Sinnott: I maintain that we in this House of Commons are wasting our time on these bills. These bills should have the consent and the consideration of the province of Alberta before they come here. If Alberta has consented to the export of these commodities then we should pass our legislation later.


[Stage Direction]
Section agreed to.
Section 7 to 11 inclusive agreed to.
Preamble agreed to.
On the title.
Stanley Howard Knowles: Before the title carries may I make one request in respect to these bills that appear on our files? I hope that you, sir, will permit me to make this request at this time. When these Senate bills are put on our files, they are placed there in the order in which they arrive, of course, but without the House of Commons number imprinted on the bill. On the other hand, if we send down to the table, or down to the distribution office, for a copy of the bill before the house, we get it with the House of Commons number stamped on the top of the bill. I am sure that many hon, members have difficulty in finding bills by the Senate numbers when after all what counts with us is the House of Commons number. I wonder whether arrangements could not be made for the House of Commons numbers to be stamped on the Senate bills before they are put on the files under our desks.
I notice that you, sir, are pointing to the fact that that number is there on the individual copies that we may get, but it is not there on the copies that are on our files. It did not happen tonight, but it does happen sometimes that a bill is passed through this house before some hon. members even find it. I think it is a reasonable suggestion.


Some hon. Members:: Hear, hear.


Stanley Howard Knowles: I hear "hear, hear" from across the way. Perhaps it can be looked into and carried out for the convenience of all hon. members.


Louis-René Beaudoin: I think there is merit in the suggestion just made by the hon. member for Winnipeg North Centre. I shall call the attention of the proper authorities to this suggestion.


[Stage Direction]
Title agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
The house resumed, from Friday, April 13, consideration of the motion of Mr. Robinson for the second reading of Bill No. 118, to incorporate Border Pipeline Corporation.
Mr. H. W. Herridge (Kootenay West):: When I was making my introductory remarks at the time this bill was last before the house I said that we in this group were opposed to this bill particularly on two grounds: First, because it was intended that this pipe line would be built with private capital; and second, because, according to the information we had, this company does not intend to pursue an all-Canadian route from the commencement of the pipe line through to the coast before it comes to United States territory.
I had also brought the attention of the house to the fact that we did have some support from other quarters of the house, and that the hon. member for Comox-Alberni (Mr. Gibson), and the former member for Vancouver Centre, had shown an identity of purpose and interest in the principle of publicly-owned pipe lines.
Before proceeding I should like to quote from the remarks of the hon. member for Comox-Alberni (Mr. Gibson), particularly as I see the Minister of Transport (Mr. Chevrier) is in his seat at the present time. At page 2808 of Hansard for April 30, 1949, the hon. member for Comox-Alberni had this to say:
There is a very important principle involved. Last night I was protesting against what appeared to me to be a tremendous lack of vision on the part of the directors of our Canadian National Railways. That railway system is in the business of providing transportation and moving freight, whether it be in the form of coal, oil, gas or any other form.
The Canadian National directors are allowing this pipe line method of transportation to be laid all along their right of way. It will be in the hands of private corporations and this tremendous freight which is originating in this north country is going to provide corresponding profits. I sincerely hope that the volume of traffic will be such that the profits will be large.
I think the Canadian National directors-I would not say the Minister of Transport-have been remiss in their duties and have shown an appalling lack of vision in not having investigated this proposal very carefully. I for one, and I am sure this would apply to other hon. members, would have been glad to approve the capital required to put in these pipe lines which would have provided a tremendous amount of freight revenue.
I am tired of voting money to defray deficits. I should like to see the Canadian National look into this matter carefully before they permit private companies to lay transportation lines for gas and oil on their right of way. They and the Minister of Transport should look into the possibilities of this form of transportation being provided by the Canadian National system.
I am quite willing to follow the advice of the hon. member for Comox-Alberni in
Border Pipeline Corporation connection with a venture that presents opportunities for profit. I am quite sure if the hon. member for Comox-Alberni says that this is a profitable venture, there can be no question about it: it is a very profitable venture.
Then in the part of his speech I read he uses the expression "appalling lack of vision". Those are the words he used. They are strong words. If we understand correctly, the word "appalling" means horrible, and when coupled with the other words it would mean a horrible lack of vision, or a frightening lack of vision, or a terrible lack of vision, or a paralysing lack of vision. There, again, I think the words of the hon. member for Comox-Alberni can be accepted by all members in the house who are getting tired of seeing American capital come to Canada and pick the cream of Canadian investment and development.
That is obvious, from the literature that is being distributed at the present time by these various companies. I am not going into that matter at full length this evening, because I wish to deal with our general approach to the problem of public ownership of pipe lines. But I do wish to bring this one pamphlet to the attention of the house. This pamphlet which I received in the mail informs me of the opportunities for making money by investing in oil or gas pipe lines. It states that the investment of a few dollars will soon return a great many dollars, and it illustrates that a few cents invested today means hundreds of dollars tomorrow. This company, in its brochure, sets out the following table:
Name of Company	1947	1950
Low High
Atlantic Oil	
-22	$3.30Central Leduc	
-15	3.85Federated Petroleums	
-23	6.10National Petroluems	
-12	3.10Pacific Petroleums	
-84	8.25


Edmund Davie Fulton: What are they going to do in 1951?


Herbert Wilfred Herridge: Then it goes on to say:
Had you only invested a mere $100 in the above shares you could have cashed in handsomely-realizing from $800 to $2,500 on your investment in little over three years.	.
My point is this, that if those profits are to be made in oil or gas, it is about time the Canadian people made them through publicly-owned corporations. And if those profits are being made they are being paid out of the pockets of the people of Canada at this time.
While I was deeply interested in the fact that the hon. member for Comox-Alberni gave such strong support to the principle of public ownership of pipe lines, I was a little

Border Pipeline Corporation disappointed in another direction in the house. The hon. member for Fraser Valley (Mr. Cruickshank) has been an ardent fighter for an all-Canadian route. Everyone gives him credit for his off-the-cuff, his on-the-cuff and his in-the-cuff speeches. But, Mr. Speaker, I am disappointed in this respect that, after having the support of the hon. member for Comox-Alberni, he does not come along with us and give us his support of the principle of public ownership of pipe lines.
I know he has thought about it. From his attitude on other questions which come before the house I know he has thought about it. He is a progressive friend of mine, and I would say that I am still hopeful. I believe the hon. member for Fraser Valley is just about to emerge from the cocoon of capitalist inhibition.
The hon. member for Fraser Valley has been greatly assisted by the hon. member for Springfield (Mr. Sinnott), who makes a rather dramatic approach at times when he talks on these questions.


Some hon. Members:: Hear, hear.


Herbert Wilfred Herridge: I appreciate the blase
manner in which he can accept applause, without even turning a hair. I understand the hon. member for Springfield is now generally known throughout Manitoba as the Cruickshank of Manitoba. But we would like him to take another step, and not only support an all-Canadian route, but say that these pipe lines should be publicly owned, and that the profits from them should go to the Canadian people. We are not suggesting that that is socialism; it is a form of public ownership.


John Sylvester Aloysius Sinnott: It is a service.


Herbert Wilfred Herridge: Yes, it is a service which should be given by the Canadian people to the Canadian people.
And I am pleased to note that the efforts of the small group in this corner of the chamber are having some effect. I remember when the hon. member for Kamloops (Mr. Fulton) used to sit at the other end of the chamber, and he voted time after time against public ownership. He was to be found with the private enterprisers. I have been informed -I am not quite sure about it, from personal experience-but I have been informed that recently in a committee which dealt with public ownership of pipe lines, and things of that kind, he has been putting forth some very strong arguments in that connection. I wish to mention in that respect that the hon. member for Kamloops has, since he voted against public ownership of pipe lines, moved down to this end of the chamber, and he now sits beside the hon. member for Cape Breton

South (Mr. Gillis). I am sure the personal contact and personal intimacy with and the fatherly advice he has received from the hon. member for Cape Breton South is having its influence. Next time this matter comes to a vote I expect to see him standing shoulder to shoulder with the hon. member for Comox-Alberni.
We in this group stand for the principle of social ownership, generally. As hon. members know, our policy is based, in principle, on a program known as the Regina manifesto. In that program the third plank is known as social ownership, and deals with the necessity of social ownership of certain things in this country for the advantage of the Canadian people.


Mr. Laing:: In agriculture?


Herbert Wilfred Herridge: Certainly not. I shall deal with that later. The hon. member for Vancouver South (Mr. Laing) says "agriculture". Apparently he has not been reading the C.C.F. program, or he does not understand it, because he would not be saying that. I expect to hear later from the hon. member for Vancouver South (Mr. Laing) because I understand he has had a speech germinating for about six weeks.
We in this group believe that there is a place for a certain amount of planning in our economy. This idea was first put forward in 1932 and 1933 by the C.C.F. when it was first formed. At that time members of this party were looked upon with great disfavour, considerable misunderstanding and some horror by those who had nothing to do previously with the study of economics. But a wider and wider section of the Canadian people are beginning to realize just what we are advocating.
We submit that free enterprise, even under capitalism, has to be modified if the needs of the Canadian people are going to be met. That is obvious. How can we say that we are moving in a period of free enterprise when we see government, because of conditions and circumstances, more and more entering the field of public investment and so on? When you see the lordis of Bay street coming to Ottawa on their hands and knees, these tycoons of the gold mining industry, seeking aid and subsidies for the support of gold mines, we should remember they are the same people who reply to the ordinary working man who asks for a subsidy for bread and milk, "My dear fellow, you must stand on your own feet; you must earn' your own living." These things indicate the changing Canadian conditions. I am not opposed to subsidies for gold mines, I am simply pointing that out to illustrate that we are not in a totally free economy at this time.

There is no particular virtue in socialism for the sake of socialism. It is not because we have a doctrinaire conception that we advocate these things. We advocate them because we believe that if we are going to have a democratic and peaceful transition to a state of society with all possible advantages, when there will be returned to the great masses of workers and producers a just share of their production, it must be done by evolutionary and democratic methods, step by step, as a result of experience.
It was because of that belief that the Regina manifesto was drawn up and presented to the Canadian people as a program. These are policies that are in keeping with Canadian tradition, Canadian psychology and Canadian circumstances. I am relating what I say entirely to the question of public ownership of pipe lines.
We in this group believe generally that our next move in the economic field-in fact we believe we are moving into a mixed economy that contains certain types of ownership-is one that should consider public ownership first of all. In the federal field we propose public ownership of railways, water transport and, we hope, gas and oil pipe lines. In the provincial field we advocate public ownership of power production, public services and things of that type. In the municipal field there will be locally owned power plants and possibly public distribution of milk, bread and things of that sort.


An hon. Member:: What about eggs?


Herbert Wilfred Herridge: Easter has gone by and we have no eggs. We believe also in co-operative ownership at all levels. At the national level there would be co-operative marketing of the agricultural production of this country, credit unions, administrative and legislative organizations and things of that type. Then in the provincial field there would be co-operative organizations which would be closer to the people. At the local municipal level there would be the consumers' store, local farmers organizations and credit unions.
We believe that there is a field for considerable private ownership. If private ownership renders a service to the community without exploitation, without the improper development of natural resources, and without monopoly, we believe it can still perform a service for the country.


An hon. Member:: What about hardware?


Herbert Wilfred Herridge: Small hardware stores, not branch hardware stores. We are opposed to monopoly in all its phases when monopoly means operation without necessary control by the government, whether federal or provincial. Obviously we must have some form of
Border Pipeline Corporation monopoly. You cannot operate a vast telephone system efficiently without a certain amount of monopoly, and the same applies to other distributing agencies, such as those having to do with power and so on. We are not opposed to monopolies as a development within capitalism simply because they are monopolies. But we are opposed to monopolies because of their effect.


Mr. Deputy Speaker:: It would appear the hon. member is going far afield.


Herbert Wilfred Herridge: I am simply illustrating the advantages of public ownership of pipe lines. If Your Honour will have patience for two of three minutes I think you will see I am quite in order. Every child in Canada is entitled to an education to the extent of his talents. Every adult is entitled to employment at satisfactory wages or salary throughout his working days. Every invalid is entitled to security. Every older person is entitled to a pension that will provide security with comfort.
We say that if a monopoly, whether it be a pipe line, a bus line, a mining monopoly or any type, is willing to operate or develop the natural resources of this country, conserving them under principles laid down by a government having the interests of the people at heart; if that monopoly is willing to pay a rate of taxation to provide a necessary standard of living and the things I have just mentioned; if that monopoly is willing to charge a fair price for its commodities or services: then we say that there is no particular virtue in socialization.


Mr. Deputy Speaker:: The principle of the bill concerns the construction of a pipe line.


Herbert Wilfred Herridge: There is no object in socialization for the sake of socialization, and if a monopoly is not able to meet these terms then we say it should be isocialized. I am sure that that would have the support of the great majority of the Canadian people if they were informed of the facts.
I shall deal now with the question of an all-Canadian route. Another objection we have to this bill is that the company will be made up largely of United States capital. I do not blame United States people for wanting to invest in pipe lines if they have the opportunity, because that might be a good thing to dio. In my opinion they cause considerable difference, and a different effect on the community and the economy. The investment of local capital means that you have people reinvesting their profits in the community, in the province or within Canada. They are taking an interest in the country. They have a personal stake in the country. They are living with the people who are

Border Pipeline Corporation working in their plants or factories, and these profits are reinvested from year to year in the country. So far as foreign investment is concerned, there is a complete loss to Canada of the total profits exported from this country each year from these operations.
We believe, Mr. Speaker, that Canadian capital is preferable in all these ventures. We also believe that the people with capital in Canada have been very shortsighted in allowing outside capital to come in and take advantage of the opportunities to make these developments. As I said before, the reinvestment of profits from Canadian capital in the Canadian economy simply means that, while we may disagree as to the justice or adequacy of the distribution of the production of the company, there is no loss to Canada as a whole. The total wealth produced remains within Canada.
Our second major objection is that this company does not intend to build an allCanadian route. This matter concerns many people in British Columbia. The legislature of British Columbia has expressed itself in favour of an all-Canadian route, and so have farmers organizations and boards of trade. If I had the time I could have quoted this evening, from the Nelson Daily News published in my own district, a report of the meeting of the associated boards of trade of eastern British Columbia at which the delegates expressed great concern over the fact that gas or oil may be piped to the United States prior to reaching the Canadian coast. I could also quote the Ottawa Citizen and other papers but time does not permit me to do so this evening.
There is no question as to the value of these developments to Canada. Their value is recognized so far as the power possibilities are concerned, so far as employment is concerned, and their great value so far as revenue is concerned. There is no question that a route through the Kettle valley is feasible. We were told the greatest lot of boloney on a previous bill. We realize now that it was boloney. Prominent engineers questioned the feasibility of the route because of sliding ground and so on and made the whole thing appear almost impossible to us. As a result of cross-examining the engineers who are going to build! the Trans Mountain pipe line we know that from their point of view the Kettle valley route is an easy one, and presents no construction difficulties.
Therefore there is no argument whatever either from the financial or from the physical point of view against the building of a gas or oil pipe line from its source straight through the Kettle valley to Vancouver prior to entering the United States. We feel very

strongly about this matter, and I wish to move, seconded' by the hon. member for Yale (Mr. Jones):
That Bill No. 118 be not now read a second time but that it be resolved that in the opinion of this house further consideration of this bill should be deferred until the house has been assured that the route of any pipe line built by the proposed company will be laid out so as to serve Canadian requirements before any such pipe line leaves Canadian soil.
In view of certain remarks made by the Minister of Mines and Technical Surveys (Mr. Prudham), I want to draw to the attention of the house the opinion of the Liberal members of the legislative assembly of Alberta with respect to the export of gas from that province. I should like to quote briefly from a Canadian Press dispatch of April 3 found in the Nelson Daily News for April 4. It reads in part as follows:
The bill permitting temporary export of natural gas to Montana for essential defence production yesterday received second reading in the Alberta legislature. It now must pass the hurdle of full-scale debate in committee before receiving third reading and royal assent. Several opposition speakers expressed concern over undesirable factors which they said export might create . . . "Who is going to benefit chiefly from our export of gas?" asked H. J. MacDonald (Lib.-Calgary). "The Alberta government gets a yearly revenue of about $75,000 in royalties. McColl-Frontenac apparently gets $10 million. Anaconda gets cheaper gas. Do we get a trade advantage equivalent to the value of our gas?"
Mr. MacDonald said export would permit the Montana Power Company to look after the needs of Anaconda with Alberta gas and reserve its own dwindling supplies for its 33,000' residential and commercial consumers.
I mention, that to indicate the tremendous profits that are being made by these companies in the piping of oil and gas to the United States without consideration for Canadian requirements and Canadian consumers. Again I say that I hope that we from British Columbia, who have been continually fighting for an all-Canadian route by amendment of these bills to include a clause that an all-Canadian route shall be built, will be successful in the present case. To date we have been successful in the case of three other bills. I hope that other members of the house will realize that our arguments are valid and are not merely placed before the house to take up time. There are no financial difficulties in the way. There are no physical difficulties in the way. We believe it is not only the duty of members from British Columbia but the duty of members from all sides of the house to stand up and fight to preserve Canadian oil and gas for the use of Canadians first before their export is permitted from this country.
On motion of Mr. Hodgson the debate was adjourned.


Mr. Deputy Speaker:: Order. It being nine o'clock the house will now resume the business interrupted at six o'clock.



THE BUDGET


[Stage Direction]
The house resumed consideration of the motion of Hon. Douglas Abbott (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Macdonnell (Greenwood), and the amendment to the amendment of Mr. Coldwell.
Ernest George Hansell: Mr. Speaker, I should like to thank hon. members of the house for their courtesy in calling it six o'clock as early as seven or eight minutes before six. It simply meant that I did not have to introduce my speech and then put it off for a period of several hours. We are now continuing the debate on the budget. Budget night usually is a big night, but why it should be a big night I do not know because the budgets that are introduced into this house in reality are designed to perpetuate a false economic system. Yet somehow or other budgets become glorified in the minds of the people. The present monetary system under which this government and its predecessors have operated is what I call an iniquitous system. In the first place it is a debt-creating system. It is a debt and taxation system. It is a system which imposes burdens upon the people. It is a system which reduces the purchasing power of the people. It is a system which impoverishes the people, and it is a system which, carried to its conclusion, takes away the right of the people to private property. Now, why such an iniquitous monetary system should be crowned with such glory and honour is beyond my comprehension. Yet, it is so crowned.
Some of us have been sitting in this house now for a great many years. I know when I first came down to this august chamber I was inspired. I felt I was sitting in the seats of the mighty. When the budgets were brought down, surrounded with all the pomp and glory that usually accompanies budgets,
I sat rather awe-inspired. I recall, not many years after I entered this house, a previous finance minister, Mr. Dunning, brought down what was publicized as his "Mayday budget," because it was brought down on the first of May. The galleries were filled with people. The press galleries were filled with [DOT]press representatives. We sat in our seats, and1 the chamber was fairly well crowded.
The Budget-Mr. Hansell At last, the minister of finance, Mr. Dunning, entered. He was applauded. I looked at him. He was dressed in his best bib and tucker. He had on his morning coat and striped trousers. He had on his winged collar and pearl-grey tie. There he stood, in all the glory surrounding this thing we know as finance. He brought down his budget. The people listened almost spellbound. What they listened to, I do not know. I do not think they knew either. This was in what was known as the hungry thirties, and I think they were waiting for some good news. When the budget was all summed up, the only relief he was able to give the taxpayers of Canada was that he took the sales tax off gopher poison.
Now, that is the record. The other night a similar scene was enacted here. As I went to dinner at around six o'clock, the people were beginning to gather in the corridors. The constables were keeping them in line. When I came down to the chamber at approximately eight o'clock at night, the galleries were crowded with people. My telephone rang several times during the day because people were inquiring whether I could get them special tickets for the gallery. The crowds were here. We were all in our seats. I do not know why we were here, but we were here anyway. The clock struck eight. No finance minister appeared. We began to break the tension by singing a few ballads. At last, about five minutes after eight, the hon. gentleman, the Minister of Finance (Mr. Abbott), entered upon the scene. Great applause from all over the house accompanied his entrance.
My thoughts went back to one or two court trials that I have attended in my lifetime. I recall the prisoners being brought up from the cells below, stumbling in. The prisoner is placed in the prisoner's dock. He is about to hear the verdict of the jury, guilty or not guilty, and the sentence pronounced by the judge. I could not help thinking how similar the scene was on a budget night to that scene in the courtroom. Here were the people crowding to get in the galleries. I have never heard yet of prisoners, who thought perhaps they were guilty of their crime, desiring with all their might to get into the prisoner's dock to hear what their sentence was going to be. Yet that night we had the people in the galleries and the pressmen, and the minister was applauded. What for? The people were there to hear what their economic sentence was going to be for the next twelve months. What had they done to deserve this fine, this penalty? Had they committed any crimes? I fancied I saw some war veterans
23S0

The Budget-Mr. Hansell there who had fought for their country. Had they come now to receive their reward at the hands of those who managed the affairs of this country? I imagined I saw mothers there who had perhaps given sons in battle for the freedom of this country. They were all there, ears wide open, waiting to hear the penalty for their crime. After all, that is what a budget is under this present iniquitous economic system of debt and taxation.
Mr. Speaker, let me ask this. What is the purpose of an economic system? Has that ever been answered by any finance minister this country has ever had? What is the purpose of an economic system? I believe the purpose of an economic system is to allow men to enjoy the fruits of their labours. If that purpose were fully realized men could enjoy the production of the good things of the earth. If that purpose were realized, men could enjoy the good things that roll off the assembly lines or come from our factories. If that purpose were realized, men could enjoy the fruits of a modern scientific age, art, music, drama, and what have you. To obtain those things should be the purpose of an economic system. But the financial policy of this government is not designed for that purpose. The economic policies of this country are designed for everything else but the purpose for which an economic system exists. This government is more concerned with keeping this debt-creating, iniquitous financial system solvent and more concerned with the entrenchment of its vicious powers than it is over the welfare of the people. I do not think I could put it in any better words than those used by the leader of this party in the speech he gave a few days ago. As reported at page 2059 of Hansard, he said: . . . the Minister of Finance is obliged-
"Is obliged", mark you.
-to administer a financial and economic policy that compels him to be a petty dictator, because it forces him to put a much higher value on statistical figures than upon human flesh and blood.
Let us see what has taken place over the years. Many speeches in this debate have touched on the apparent shrinkage in the value of the dollar. Might I emphasize my remarks by pointing out one place in which that shrinkage is extremely evident today. Some years ago the government floated loans. They encouraged the people to buy bonds. They told the people that those bonds would always be worth 100 cents on the dollar. Even though they might be valued today at 100 cents on the dollar, we all know that that 100 cents will not buy what they used to buy when the bonds were bought. What happened was that honest people bought bonds

with honest dollars. Now those honest people are obliged to sell their bonds for dishonest dollars. A dollar is dishonest if it does not purchase the same amount of goods when it is spent as it does when it is earned. For instance, honest pensioners receiving pensions in those days now find their dollar depreciated in value. They cannot buy much more than half what they could buy in 1939.
Let me draw to your attention, Mr. Speaker, an illustration or two which will perhaps bring the matter a little bit more forcibly to the attention of the house. Suppose an industry should enter into an agreement with its employees for the institution of a pension scheme. Suppose the agreement was that, if the employees paid contributions into this pension scheme, they would receive $50 a month on reaching retirement age. Then suppose that when the workers reached pensionable age and were entitled to $50 a month, the industry should pay them only $25 a month. Suppose the industry should say, "that is what we are paying you; we do not care what the agreement said." What do you suppose would' happen in a situation like that? The industry or company, as the case may be, could be brought to trial and severely penalized. Yet that is exactly what happens today, only it is the government, through its financial policy, which is the culprit.
Then again, suppose labour should contribute to a pension fund a million dollars a year, for instance. I may say that this is another illustration. Then suppose it was discovered at the end of five or ten years that the company had stolen or misappropriated half a million dollars a year. What do you suppose would happen? The officers of the company, as the case may be, could be jailed for robbery or embezzlement. The financial policies of this government have exactly the same effect as that which would1 follow if the officers of the aforementioned company had stolen half a million dollars. That is what happens today, only the government, by its financial policies, is the robber.
Let me use another illustration. I know that we all talk of dollar values and that sort of thing; but if the government does not know how to manage the financial affairs of the country, they are responsible for the depreciation in dollar value. Suppose there are two farmers-and this is a homely illustration-who are neighbours. Suppose one man gets a crop and the other man does not, and the man who does not get a crop goes over to his neighbour and says, "I have not any winter potatoes this year. Could you let me have a supply?" The farmer who had a crop would say, "Why yes, I will let you have

your winter supply of potatoes. I will give you ten sacks. You can repay me the ten sacks some other time." His neighbour thanks him very much, and takes the ten sacks of potatoes. The next winter the farmer who did not have a crop the winter before now has a nice crop and he goes over to his neighbour and says, "Neighbour, I want to pay you back the potatoes that you gave me a year ago". Then suppose when they unload the potatoes, instead of finding ten sacks there in payment for the potatoes borrowed the winter before, he finds only five sacks of potatoes there. What would you say to that? What would the farmer say to that? I know it is just a homely illustration, but the fact of the matter is that the financial policy of this government has the very same effect. What would you say to a farmer like that?


An hon. Member:: Throw him out.


Ernest George Hansell: You would say, "Throw him out". You surely would. That is what the people are going to say one of these days about this government.


Some hon. Members:: Oh, oh.


Ernest George Hansell: I said that this was indeed an iniquitous system. It is an iniquitous system because it is based upon a false premise, namely, the assumption that the system in itself is self-liquidating whereas in fact it is not. I wish hon. members would understand this. I wish those in charge of the financial policy of this country would understand it. The only way money comes into existence and gets out into circulation is through direct creation by the banking system. Nobody disputes that. And that is done by way of loans. Every bank loan means an expansion of the credit of the country, and every loan means that new money comes into existence. But every loan must be repaid. And every loan is repayable at an interest. Since all money is a statistical creation, it is impossible to pay the interest unless the interest is also created. To assume otherwise is one of the false premises upon which the present financial policy of this country is built.
The minister assumes that the system is self-liquidating, and it is not. The fact of the matter is the minister might just as well say that we can pay back a $5 loan with $4. It just cannot be done. And then I read what the parliamentary assistant to the Minister of Finance said in his speech the other day. I have not read his entire speech, but I have an analysis of it in the newspaper. Here are the headlines: "Budget tough but realistic, Sinclair's reply to opposition." How the parliamentary assistant to the Minister of
The Budget-Mr. Hansell Finance -could say that it is realistic to say that $4 will pay a debt of $5 I do not know. He must have to stretch his imagination a long, long way.


Jean Lesage: Or stretch his dollars.


Ernest George Hansell: My hon. friend says, "stretch his dollars." That is right. We surely have to stretch the Abbott dollar today. If we wanted to buy what it used to buy a- few years ago we would have to stretch it a long long way. You talk about rubber money. If there was ever a day when- there w-as 'any rubber money in existence it is the Abbott dollar of today.
About this false premise, Mr. Speaker; the Minister of Finance can be pictured as attempting to do something like this. This is a very homely illustration. Let us suppose that we have a thousand gallon tank filled with one thousand gallons of water. Beside it is an eleven hundred gallon empty tank. I can see the Minister of Finance on top of the thousand gallon tank.


Gordon Knapman Fraser: Don't let him fall in.


Ernest George Hansell: He is pumping the water out of the thousand gallon tank into the eleven hundred gallon tank. He is pumping and pumping and pumping. At last he gets the thousand gallons of water out of the one tank into the other tank, and he still has space for another hundred gallons. He continues to pump and pump. At last he peels off his coat and then he pumps some more. That is the sort of thing that the parliamentary assistant to the minister calls being realistic. Yes, sir, he takes off his collar and his tie and he continues to pump. We ask him what he is doing, and he says: "I am trying to get another hundred gallons into that tank", but the tank from which he is pumping is already dry. We say: "But you are working on a false premise. You cannot do that." He says: "Oh; what do you know about it?" And he pumps again. He works himself into such perspiration that he peels off his trousers and shirt. I see him on top of that tank in his-


Some hon. Members:: Order.


Ernest George Hansell: I fancy the minister wears shorts.


Some hon. Members:: Order.


Ernest George Hansell: If the taxes continue some of the consumers of this country will have to go without them pretty soon. There he is on top of this tank pumping and pumping. Is that the sort of thing we call being realistic? We l-a-ugh at the illustration. I laughed at it myself when it popped into my mind, and then I saw about 265 M.P.'s all gathered

The Budget-Mr. Brisson around looking up at him, -and I heard a few say: "Why, the guy has gone nuts." And there were about-I have forgotten the ratio -about 196 of these fellows saying: "You know, that is one of the greatest men in Canada." Others say: "He is nuts. He must be."	The hon. member for Acadia (Mr. Quelch) says he does not know it. That is all.
This afternoon I heard the speech of the hon. member for Mount Royal	(Mr. Macnaughton), who said that the Minister of National Revenue (Mr. McCann) should send some public relations men throughout this country to explain to the people why the painful process of collecting taxes is necessary to the just operation of our system. What we need, Mr. Speaker, is public relations men to go out and tell the people that the painful process is necessary to the operation of an unjust and iniquitous system. After seeing the Minister of Finance pumping, what we need are public relations men to go out and explain to the people how they are being pumped.
I know, Mr. Speaker, that some will answer and say, well, we are not so worried; you know, it is a funny thing but the Liberals are elected all the time. I know that up until now they have been. Perhaps it is because of the weakness of the opposition's appeal-I do not know. It may be that the people are not aware of what is happening. Simply because the Liberal government is elected it does not justify the error that exists in the present monetary system. I read an item which I clipped from somewhere, but I do not know where I got the little paragraph. But it is something that hon. members would do well to keep in mind; and this is what it says: "The greatest danger to democracy is the belief that there is virtue in error when multiplied by votes". I saw that in a clipping somewhere, but I do not remember where I got it. However, it is something worth retaining in one's mind.


James Sinclair: Beauchesne?


Ernest George Hansell: The greatest danger to democracy is the belief that there is virtue in error when multiplied by votes. And I say this in closing, that until the people are aroused as to the terrible consequences of such an iniquitous and devilish financial system, they will continue to suffer the economic stringencies imposed upon them against their will, a policy which will ultimately lead to destruction, war and world slavery.
(Translation):


Mr. Lomer Brisson (Saguenay):: Mr. Speaker, this is the first time I have the honour of speaking in this house. I owe this high privilege to my electors who entrusted
fMr. Hansell.]
me with the pleasant duty of representing here Saguenay county, the most beautiful constituency in Canada. I might be tempted to let its attractions and wealth go unmentioned since they have become so outstanding on the American continent, but I cannot help review the physical and human forces which ushered in this glory and are destined to attend and support it, while dutifully restraining and assimilating it.
Who would have believed, twenty or even ten years ago, that this district would be the meeting point of some of the greatest financial wizards of the American continent? Who would have thought that as one of their main arguments in support of the St. Lawrence seaway, politicians would point out that it would facilitate the shipping of iron ore from this district to American steel mills? Who would have imagined that this land of Cain-so it was called in a recent national film board release-would: become the hope of the Canadian nation and a source of anxiety to the opponents of democracy?
The Saguenay, it might seem, has just discovered where its destiny lies and has proclaimed, in the face of the world, its right to existence. Conditions in Canada have, so to speak, steeped it in profound humility for four centuries. But the longer its sufferings, the more shining will be its supremacy, provided however-let us not forget this- that all concerned co-operate to give it a crown worthy of its virtues.
Saguenay county, Mr. Speaker, is that huge area of 374,950 square miles, the boundaries of which are: to the south, the river and gulf of St. Lawrence, for a distance of approximately 700 miles from Tadoussac to Blanc Sablon; to the east, the strait of Belle Isle and Newfoundland's Labrador; to the north, Ungava bay and Hudson strait; to the west, Hudson bay and James bay. Its area is equal to more than half the area of the province of Quebec and to one tenth the total area of Canada. Its geological crust, one of the oldest in the world, assumes shapes at times rugged, at times varied, at times freakish, sometimes uniform, but always spectacular.
Its climate, which is some degrees lower than that of the Quebec district, up to Sept-Iles, gets gradually cooler as one progresses northward or eastward. According to the 1941 census, this territory had a population of 28,856 inhabitants. In the 1951 census this figure will probably be close to 40,000 and it is to be expected that it will double within a few years. May I then be permitted

to express a wish. I would like the Canadian parliament, in giving the province of Quebec more adequate representation, to divide this constituency into two parts and to call the new division St. Laurent. This would serve a double purpose. It would recall two identities most dear to the hearts of all Canadians, the St. Lawrence river and the present Prime Minister, the Right Hon. Louis St. Laurent.
From a historical point of view, Saguenay county has nothing to envy the rest of this country. In Bergeronnes, my native parish, there is a monument which recalls the Basque fishermen who came here in the thirteenth century to hunt sea-lions. Other relics corroborate this fact. The discoverer of Canada, Jacques Cartier, knew of the fact and Samuel de Champlain, the founder of Quebec, christened some rivers, as his chronicles indicate. Louis Jolliet held.' a seigniory there and today a search is going on for the burial-place of that distinguished resident. Moreover, in the early days of the French colony Tadoussac was the favourite meeting-place of Ihe fur-traders. And the village of Tadoussac has preserved one of the oldest chapels in the country.
Saguenay county, Mr. Speaker, is also the county of water power. Nearly all its countless rivers have waterfalls which, if they were all developed, would produce enough power to supply the needs of American and Canadian industry. I shall mention only a few of the most important ones: Portneuf, Bersimis, Outarde, Manicouagan, Ste. Marguerite, Magpie, Romaine and St. Augustin.
It is also a fisherman's paradise. The privileged few who have had the opportunity of tasting the salmon of the Moisie river know what I mean. Trout is plentiful in its lakes, which are noteworthy for their number, their size and their colours. As for the St. Lawrence river, it supplies all the varieties of fish; caplin, smelt, halibut, cod, lobster, etc. The people east of Sept lies, with the exception now of the people of Havre St. Pierre, depend almost exclusively on fishing for their livelihood. Unfortunately, fish have not been too plentiful these last few years and the market has been unsteady. In 1949-50 the federal Department of Fisheries understood the plight of these fishermen and provided a substantial grant for which I thank the authorities. However, these people should be entitled to unemployment insurance benefits.
Furthermore, my constituency is a hunter's paradise. Who is not familiar with the mink,
The Budget-Mr. Brisson the beaver and the moose of the north shore, with the deer which gambols so graciously on Anticosti island, with the sea-lion of La Tabatiere where Mr. Louis T. Blais, of Quebec city, operates a plant for the extraction of seal oil, the only plant of its kind in the province of Quebec. Moreover a few hundred migratory birds live on these majestic islands which extend from the Mingan archipelago down to Blanc Sablon.
Besides these rivers, lakes, islands, hunters' and fishermen's paradise, there are deep and delightful bays with sandy beaches where trim villages are located. Tadoussac bay, where each summer the Canada Steamship Lines bring thousands of American tourists, is undoubtedly the best known, but there are others whose captivating charm lingers with the visitor. Seven Islands bay, for instance, one of the most beautiful, is large enough to harbour the whole British fleet. For all those reasons I have no hesitation in stating that Saguenay county is a tourists' paradise.
Saguenay is first of all a lumber country. Many of our most powerful lumber companies have set up mills and camps in that part of the country since the beginning of the last century, such as the Consolidated Paper, at Les Escoumains, Portneuf and Anticosti; the Donnacona Paper, at Sault au Mouton and Papinachois; the Anglo Pulp, at Forestville; the Quebec North Shore Paper, at Baie Comeau, Franquelin and Shelter Bay; the St. Regis Timber, at Godbout; the St. Lawrence, at Trinity Bay; the International Paper, at Pentecote; the Gulf Pulp, at Clarke City. Those companies cut more than a million cords of wood each winter and employ thousands of lumbermen. At Baie Comeau, the Quebec North Shore has one of the most modern newsprint plants in the world; this plant supplies the Chicago Tribune.
The Saguenay region is now dotted with mines. The Quebec Iron and Titanium Corporation located 200 million tons of titanium at Havre St. Pierre, near Allard lake, and built a 27 mile railroad to link the mine with Havre St. Pierre. As early as 1950, the company shipped 100,000 tons of ore to Sorel.
At Knob Lake, in northern Quebec, the Labrador Mining and Exploration Company located 281 million tons of iron ore. A 357-mile railroad will soon be built between the mine and the harbour of Sept lies. The Iron Ore Company of Canada hopes to be able in

The Budget-Mr. Brisson 1954 to ship 2,500,000 torus of ore to the steel mills.
Finally, Mr. Speaker, the constituency of Saguenay is the land of the hardy pioneer who often settles on land very hard to clear. There live resourceful farmers who make the best out of what is often poor soil, provident merchants who have to build up supplies so as to meet the demand for many months and who patiently wait for incoming mail. It is the country of the confident lumberjack, who is not afraid to leave his home for months; of the stout-hearted fisherman, who has to get up in the middle of night to gather what the sea feels like bestowing upon him; of the sturdy seaman who fearlessly faces raging waves miles from shore to carry materials and supplies. There we findi the unselfish mother who courageously gives her country eight, ten, twelve or even fifteen sons and daughters; the indefatigable doctor who has to make the best of any means of transportation at his disposal so that the lives of his patients can be saved'. It is the country where the missionary epic has been written-one should read about it in Father Garnier's book "From dog-gledt to airplane"; it is also the country of the undaunted bishop who must summon up all the resources of his mind to build up an episcopal town out of thin air. The heroic apostolic vicar must face all kinds of perils to help his flock. Thousands of French-Canadians are happy to work there. It is the country of hundreds of Acadians who came from Magdalen islands, and from centres in Acadia and who have kept their ancestral traditions, not to mention hundreds of people from Newfoundland who are a credit to their native country. Finally, it is a country where hospitality is proverbial, where nothing is to be denied to the first caller, where different races as well as capital and labour compete in a friendly manner, where hundreds of Indians live in fine reserves with all due respect to His Majesty.
I congratulate the Minister of Citizenship and Immigration for the splendid residential school he has provided for the new Indian reserve of Sept lies. The school will be blessed next summer. I congratulate him also for the bill he has introduced in this house with a view to improving the conditions of the Indians. I earnestly hope that the recommendations of the Canadian episcopate regarding the education and hospitalization of those Indians will receive full consideration. I wonder also why we could not prohibit their consumption of liquor outside the reserves, since they are not allowed to use liquor within the reserves.
(Text):
Mr. Speaker, I should like to be able to convey to my English speaking colleagues some idea of the beauty and the resources of my constituency. But my knowledge of that language will not permit me to do so. For that reason I invite them to visit my constituency and I feel sure that their visit will substantiate all my claims in respect to it.
(Translation):
In that country of unrivalled beauty, why is it that tourists have barely gone farther than Tadoussac? Since fish and game are plentiful, why cannot hunters and fishermen earn their living? In that country of vast water power, why are there so few small or large industries, and in that forest land only one newsprint industry? Lumbermen flock to this district by thousands and work there six months at lumbering operations, but why will they not settle there permanently with their families? In that mining district why is it that, with the exception of Sept lies and Havre St. Pierre, people hardly benefit from the present developments? The inhabitants are vigorous people, but the sick are deprived of the benefits of modern technical developments. Why are we still without a technical or high school, and why must we send our children outside so that they may get proper schooling? Why are trade relations so difficult with the outside world? How is it that there is hardly any increase in population? In a country where people are so hospitable and so generous, why is it that, in many cases, the inhabitants of neighbouring villages hardly know each other? Why are strangers reluctant to visit there? Why is it so difficult to organize a diocese with its proper institutions? Why is it so hard to foster a regional spirit and to develop all the social works and cultural attainments that flourish elsewhere? In short, why is this constituency, blessed as it is with unlimited potentialities and1 having a history four centuries old, still in the cradle as far as its real development is concerned? Obviously, there are many reasons, but among the main ones, and I say so without hesitation, is the isolation which, even in this, the twentieth century, prevails in that district. I feel I am expressing an opinion which is deeply rooted in the hearts and minds of the vast majority of my constituents. This frustration sometimes leads to exasperation. I cannot resist the temptation of quoting a few lines from a letter I received' recently from an elector of my constituency:

The bridge is coming, but water flows under the bridge and beside it, at a time when one is sorry to be on the shore because we are so isolated. There is no road, no crossing ... no way out.
Speaking from my own experience and from that of others, how much evidence I could bring in support of this argument since I am a bona fide son of that district and the representative of that constituency. Could it be then that the government of this country have failed to do their duty?
Has not the Department of Public Works been spending millions in the Saguenay district, in the past few years, for the construction and repair of wharves? This year, the amount set aside for the construction of wharves at Tadoussac, Sept lies and Havre St. Pierre will stand at about $2 million. Does not the same department grant generous subsidies for the construction and repair of retaining walls in my constituency? I congratulate the member for Kamouraska (Mr. Masse) for having placed on the order paper a resolution, in order to call the government's attention to the erosion problem on both shores of the St. Lawrence. I support this resolution since it concerns the entire length of my constituency.
Has not the Department of Transport, for its part, built powerful and solid lighthouses to make navigation safer? I will mention but a few: Portneuf, Pointe des Monts, lie aux Oeufs, lies Cawee, lie au Perroquet, Pointe Natashquan, Cape Whittle and Table Head. Does it not, moreover, generously subsidize the Clarke Steamship Company in order that it may operate an excellent freight and passenger service between Montreal, Quebec, and Blanc Sablom, as well as the Compagnie de navigation du Bas Saint-Laurent, which operates a similar service between Rimouski or Matane, Forestville and beyond to the intermediate ports, as far as Sept lies? Does not the government, moreover, spend considerable sums of money to build modern airports, such as those in Baie Comeau and Sept lies? Has not the Compagnie de telephone du Gulfe Saint-Laurent, ever since it acquired the telegraph and telephone system in the Saguenay, also spent considerable sums of money in order to improve the service?
On the other hand, the Post Office Department is doing everything possible to ensure efficiency in transportation of mails on the north shore, by ship, plane, truck, dog-sled, etc.
But, hon. ministers, even though I thank you most sincerely for this assistance on behalf of my constituents, you know that it
The Budget-Mr. Brisson is insufficient. Every day I have occasion to ask you for a new wharf, a new retaining wall, a new airport, a new extension of the telephone system, a better steamship service or, more frequently, an improvement in the mail service. You can be sure that all those requests are legitimate and necessary, and I earnestly hope that they will be granted.
But, in my opinion, the real problem lies elsewhere. Better water and air transport between the north shore and the rest of the country will lessen the problem of its isolation, but it will not solve it. Because of its climate,

and the same goes for the rest of the province of Quebec-water and air transport will always be extraordinary means of transport. Let us admit it frankly, Saguenay county suffers from isolation in this twentieth century, simply because it has a road which is hardly practicable over a distance of 135 miles, from Tadoussac to Baie Comeau, and it has no railway.
Could it be that the provincial government has forgotten Saguenay county in its roadbuilding program, when the claim is heard all the time that the Union Nationale has given everything to the province of Quebec! Will they do something about it soon, as they say they will? Will the revenues derived from the mining rights in New Quebec be enough or do they rely on their new tax on gasoline? Be that as it may, the problem is urgent and unfortunately the provincial government of the Union Nationale is slow in solving it. If that road had been built a few years ago, Saguenay county would have surely benefited more from the new developments in New Quebec.
Should I be talking about a second trans-Canada highway in the Saguenay when so far there has been no agreement between the federal government and the Quebec government as regards the original project? It might be a good thing if the federal government, the Quebec government and the Newfoundland government got together to consider the possibility of linking Newfoundland to the mainland, by building a dam over the strait of Belle Isle which separates Blanc Sablon and Newfoundland over a distance of only nine miles. Commander Beauge has already mentioned this possibility. This project would also have a considerable and beneficial effect on the weather on both shores of the St. Lawrence, and would also constitute a valuable con-
2356	HOUSE OF
The Budget-Mr. Brisson tribution to national defence in case of war. Let us not forget that during the two last wars, the enemy aimed their devastating projectiles at both shores of the St. Lawrence. Was that not the kind of protection the United States authorities had in mind when they built naval bases at Longue Pointe de Mingan, on the north shore, at Goose Bay, in Labrador, and at Gander in Newfoundland, during the last war?
What I really wish to ask the federal government tonight is to consider the possibility of building a railroad in the Saguenay region. The problem is directly under its jurisdiction. The member from Charlevoix (Mr. Maltais) is to be praised for placing a resolution to that effect on the order paper, early in the session. Railroads have helped the development of western provinces and strengthened our federal union. The Saguenay region could therefore also benefit in every respect from the construction of a railroad. At one time, many reasons could be given to prove the project impracticable: sparse population, lack of natural resources, technical difficulties, etc. Today such obstacles fade away in the light of the enormous development that is taking place in Ungava. If it is worth spending millions to build a railroad that will carry iron ore from Knob Lake to Sept-Iles over a distance about equal to the distance between Murray Bay and Sept-Iles; if, for the same reason, it is found advisable to complete the St. Lawrence seaway, is it not also worth spending a few millions to ensure the happiness and the well-being of the local pioneers and of the miners who will bring out this iron ore? Is it not true that the building of a railway is the only way to make available to the Canadian people the wealth and the wonders that are plentiful in that region, and would it not be the proper way to provide its population with a standard of living in keeping with our Canadian way of life? I leave this problem with the government because I am sure it will be considered with the greatest care as well as all other matters that make for a prosperous Canada.
Obviously this may not be the proper time to raise such an important question, because of the huge war expenditures with which we are faced at the present time. Under those circumstances, one cannot help regretting that constant threat of destruction we have to face when there are so many wonderful things to be accomplished at home


It is then our duty to avert the danger by strengthening our internal peace so that we may pass it on to the world, for we must not forget that international peace, like personal and national peace, can be achieved only through great sacrifices. If our country enjoys peace today, it is because our fathers made common sacrifices to build confederation, because the two great races making up our country gave up a certain pettiness in order to work towards appropriate ideals; because both capital and labour agreed to mutual sacrifices in the general interest; because the government provides social security benefits, thereby returning to the less fortunate certain taxes levied on the citizens. Let this same spirit prevail in our attempts to solve also the constitutional problems facing the ten provincial governments and the federal government, or in the closer co-operation of the two elements of our country if we wish to be soon unfettered and free. Instead of overstressing racialism and national sovereignty, nations should make greater efforts to practise charity and universal brotherhood, if salvation and not destruction of our civilization is to be attained. The Colombo plan surely came out of that principle; let us warmly congratulate the Canadian government for the generous contribution it contemplates.
In conclusion, I will express two wishes: that our government should send an ambassador to the source of peace, the Vatican, and that our very distinguished Secretary of State for External Affairs, the Horn. Lester Pearson, should continue to work for peace at the United Nations.


Mr. Leon Balcer (Three Rivers):: The Budget-Mr. Balcer that if our economy is ruined by inflation, we shall be at the mercy of our enemy. Before going out to fight for democracy we must make sure that it is established on a durable basis in our country.
The Minister of Finance (Mr. Abbott) must necessarily balance the budget and of course he must raise the money required for the defence of our country. These last few years, the government announced outstanding surpluses; it must not be forgotten however that in each case they were due to increased revenues and not to reduced expenses.
It is much more difficult to go in for rigid economy when there is a surplus. Everybody knows that as one's income grows, it becomes practically impossible to refrain from spending.
Moreover, those excess revenues will eventually lead the government into committing itself to extraordinary and unforeseen expenditures. Therefore, I believe that the government should do its best to refrain from helping inflation, by avoiding such expenditures, as well as any taxes which are not strictly required to balance the budget, for taxation bears more heavily on the small taxpayer. It is well to remember that the Canadian dollar today is worth 50 cents, or only half as much as in 1939. It is true that production and salaries have increased, but one must not overlook the problems which face the head of a family who earns, for example, as does the average worker in my county, a little over $40 a week, and who wants to give his children not luxuries, but merely milk, at 18 cents a quart, meat at $1.00 a pound, not to mention rent, shoes, clothing and education.
Even if the head of a family had dreamed of buying his wife a washing machine by saving his full salary for five weeks, his dream would have quickly vanished with the new tax levied on those articles.
Nobody would complain if luxury items were the first to be taxed. Unfortunately the Minister of Finance has a strange notion of luxuries. I think he should ask the Canadian housewife who spends a whole morning cooking for the family, or doing the week's laundry in her washing machine, if these are luxury articles.
In view of the already high prices asked for such things as refrigerators, stoves and washing machines, we cannot help feeling that the new tax on those items is far too heavy.

Finally, I must protest against the fact that the government apparently wishes to protect the liquor industry. If a commodity can indeed be classed as a luxury it is that one. Experience has shown that despite all increases in the price of liquor, sales have boomed. Besides, people were expecting a tax on liquor. Indeed on the eve of the budget liquor stores were stormed by people anxious to stock up. We all know that fancy prices are hardly a deterrent to people who want their liquor.
At all events, a tax should have been levied and the minister's explanations in that connection are both lame and obscure.
Finally, Mr. Speaker, I doubt very much whether the budget, and in fact the whole government program, can help curb inflation, which the Canadian people have the right to expect and are earnestly requesting. I sincerely hope that the house will support the amendment moved by the hon. member for Greenwood (Mr. Macdonnell), as I propose to do.
(Text):


Some hon. Members:: Question.


Mr. George A. Drew (Leader of the Opposition):: Mr. Speaker, before the question is put to the house I wish to make a few remarks, although it is not my intention now to make remarks that I shall make later on the main motion. As to this amendment, I wish to indicate that I believe its purpose is appropriate in view of the general effect of the budget that has been presented. It has already been said on a number of occasions-and I do not intend to repeat those arguments at the moment-that this budget bears most heavily upon those who are least able to pay any added taxes at this time. Instead of attempting to encourage saving or to ease the pressure on those who are already finding it extremely difficult to meet the greatly increased cost of living, the taxes have been so imposed that they will bear most heavily upon pensioners, upon those on smaller fixed incomes and generally upon those with the least ability to pay. That is particularly true of the sales tax which has been increased by 25 per cent of the amount previously levied. It will bear heavily on those who are already finding prices much too high on the things they need for their daily life.

Then, for reasons which have not been explained satisfactorily at any time since this budget was introduced, taxes have been imposed upon things that can only be regarded as necessities, such as stoves, refrigerators and things of that sort which today we are encouraging people to buy because of the increased rural as well as urban electrification throughout the whole of Canada. In addition to that, there is the fact that automobiles can no longer be regarded as a luxury by many of our people. In many communities today it would be impossible to carry on the ordinary occupations of the people unless many of them had automobiles in which to get to work. As a number of hon. members will know, as a result of the suddenly increased activities of defence plants many workers are driving fifteen, twenty and twenty-five miles a day to work, and some of them more. To them the automobile is a necessity. If, therefore, there were to be increases in taxes, those increases should have indicated some recognition of the difference between an automobile that is a utility, an automobile that will serve the purpose of being a conveyance to those who must have it for that purpose, and an automobile that can properly be regarded as a luxury. Therefore the whole taxing scale should have had some recognition of that fact. Go right through the budget and the same is true. There is no recognition of the fact that today the burden of the increased cost of living is bearing most heavily on those on smaller incomes, and particularly those on fixed incomes or on pensions. For that reason the surtax should not bear as heavily on those who will have the greatest difficulty in meeting those other obligations. For that reason I believe it is appropriate that the surtax should start at a higher level than that indicated in the budget. For that reason I propose to support the subamendment.


Mr. Charles Cannon (Iles-de-la-Madeleine):: Mr. Speaker, in rising to take part in this budget debate, I wish, first of all, to congratulate the Minister of Finance on his excellent work.
His budget distributes with fairness to all taxpayers the heavy burden of taxation. Of course, taxes and especially new taxes are never popular. Most people realize, however, that these taxes are rendered necessary by our rearmament. In the present international situation, the expenses to be made in this connection are the price we must pay for our freedom, for the preservation of peace and of our way of living.
In general, the budget was well received by the people. Having received no protest from my constituents in this regard, I am inclined to think it has met with their approval. On the whole, the criticisms levelled against it are unjustified. The budget, it is said, is not based on the taxpayer's ability to pay. Criticisms in this connection are directed mainly against the increased income and sales taxes. The increase in income tax, as of July 1, being 20 per cent of the present tax, is certainly based on the individual's capacity to pay. Those who, up to now, have only paid a small tax, will now pay a slightly higher tax and those who were paying a heavy tax, will have to pay even more. The new tax certainly takes into account the people's capacity to pay, since it is based on the present tax, which in turn is calculated on the taxable income after deduction of all personal exemptions to which the taxpayer is entitled.
The government is also being blamed for increasing the sales tax. It has been said that it strikes too heavily at the low income group. As stated by the Minister of Finance in his remarkable speech, the sales tax does not apply to all necessities of life. There are numerous exemptions. Ninety-five per cent of foodstuffs are exempt. All fuels and building materials are free from tax. I believe it can be said that two-thirds of the average Canadian family's expenses are not affected by the sales tax. According to a

recent survey made among people earning less than $3,000, only one-third of the total revenue is spent on goods subject to the sales tax. It is therefore incorrect to say that the sales tax is unfair and backward.
Our opponents object to the 15 per cent tax on gas and electric stoves, as well as on mechanical refrigerators and washing machines. They feel sorry for young married couples who will have to pay more for these articles. I think that their sympathy is out of place. These are luxury articles and under present conditions I believe the government did well in taxing them. The percentage of newly married couples who bought these articles, even before the new taxes, was comparatively low. As far as I am concerned, I had been married several years before I could afford the luxury of an electric stove and refrigerator; in rural districts and especially in my constituency of Iles-de-la-Madeleine, these articles are rather scarce.
Opposition members also claim that corporation taxes are too low. Right now, the two taxes on corporation profits, the federal tax and the provincial tax, absorb more than 50 per cent, 52-6 per cent to be exact, of a corporation's net profits. If the tax were to be increased further, its effect would be to discourage the investment of foreign capital in our province, a capital we badly need to develop our natural resources. The ones to suffer would be the worker and the farmer.
Indeed, if new industries are not established, if the existing industries are not expanded, that will mean so many new jobs that will not be created, so many unemployed who will not find employment and, with the resulting drop in the worker's purchasing power, the farmer will inevitably be affected since the price of agricultural products will necessarily have to drop. There are, therefore, as regards corporation taxes, certain limits which it would be dangerous to exceed.
These taxes, as I indicated earlier, are not popular. In proposing them the government has had to choose the least of many evils. The house knows, Mr. Speaker, that no government likes to impose new taxes. It is an unpleasant duty which they have to perform and which they do not relish any more than do the taxpayers who have to pay, among whom may be found, let us not forget that, the ministers themselves who impose these charges.

This duty is thrust upon them by the international situation and by the fact that free peoples find themselves obliged, much against their will, to arm themselves and to combine these armaments in order to resist communist aggression which, ever since 1945, when we thought the war had ended, has not ceased: to attack and enslave free people who were in no condition to defend themselves. This went on until the United Nations called a halt to it by going to the defence of Korea.
People who are sincere and as well informed as are the members of this house know that our own government, as well as those of our democratic allies of the second world war, had but one desire: to put an end to the armaments race, to enjoy a long period of peace, to reduce taxes and to develop our resources for the welfare and the prosperity of our people. Our government gave evidence of its peaceful intentions when it demobilized as soon as possible and sold the war material, the equipment and even the buildings it thought were no longer needed1 for national defence.
Therefore I regret, Mr. Speaker, that during this debate the government should have been taken to task for selling war material it thought would no longer be required. I am sorry too that speeches were made in this house to extol peace-as if we were not all in favour of peace-with the cynical suggestion that people are willing to pay taxes for peace activities but not for war purposes.
I mention this in passing, Mr. Speaker, because my impression is that talking like that in this house is an easy way of becoming popular with those who do not consider the situation fully, but it certainly does not help the people to accept the necessary sacrifices which we must absolutely impose upon ourselves to save from communism our liberties, our institutions and even our religion. Let us not forget how the Roman Catholic religion was persecuted in the countries behind the iron curtain. We must be realists and understand that unfortunately it is not by speaking in praise of peace that we will prevent the communists from attacking us.
Mr. Speaker, when the Minister of Finance presented his budget he told us he had two main objectives: the preservation of peace and the control of inflation. He told us about the steps to be taken to achieve this last objective, but he also said that the government was not ready at this time to set up price controls.
The Budget-Mr. Cannon
The Prime Minister, our respected leader, has explained the motives upon which the government based its decision. I have listened with great interest to these explanations. However, I feel I must call the attention of the government and of the Minister of Fisheries (Mr. Mayhew) in particular to the serious effects of this decision not to impose controls, however sound it may have been, on the fishermen who constitute 85 per cent of the population of my constituency.
The cost of living has gone up in the Magdalen islands too, even more than elsewhere because of the higher cost of air or sea transport, the only way the islands can be supplied with many of the necessities of life. Fishing tackle, boats, engines, nets, fishing gear, gas and motor oil, are all a great deal more expensive. On the other hand, the price of fish is coming down and fishermen are in a difficult and very special situation.
True, the cost of living has gone up throughout the country, but for most Canadians higher costs have been at least partly offset by wage increases or, in the case of farmers, by higher prices for their products. But not so for the fishermen of the Magdalen islands. The high cost of living, combined with low prices for their fish, is almost unbearable for them and the oldest industry in Canada is in a most critical condition as a result.
Petitions signed by almost all fishermen on the islands have been sent to both the federal and provincial ministers of fisheries and their deputies. The preamble of those petitions is identical. I shall read it to the house, because it indicates the state of mind of the petitioners.
Whereas for the last few years and especially since 1945 the fishermen's condition has become so critical that their industry is expected to collapse from one season to the other. Every year an increasing number of fishermen quit their trade to earn a better living elsewhere. The fisherman cannot earn a living when his costs are greater than his income. This is very often the case since the cost of living has been increasing and the price of fish has had a tendency to decline;
Whereas the cost of living has increased at a more alarming rate here than elsewhere because of transportation charges which have doubled and even tripled during the last decade;
Whereas fishing gear has become a luxury because of its exorbitant price, making it impossible for fishermen to renew their tackle, so much so that they are now obliged to give up their trade or to operate at a loss;
In the islands, three types of fishing make up the main and practically only industry of the ten thousand inhabitants: lobster fishing, mackerel fishing and cod fishing. Since the end of the war, the price of the gear necessary for these types of fishing has doubled and even tripled, whilst the price of
2362	HOUSE OF
The Budget-Mr. Cannon fish has declined instead of going up with the rest. Thus a lobster cage or trap which formerly sold for $1.25 now costs $2.75. A mackerel net has increased from $18 to $45 and the cod trawl has doubled in price. Everything used for fishing, from rubber clothing to gasoline, has greatly increased, while the price of fish has decreased as follows: lobster, 3 cents per pound; cod has gone down to about 2i cents a pound and mackerel in the same proportion;
Whereas the lack of balance caused by the rising prices of fishing gear and the. decrease in the price of fish greatly affect the fisherman's budget and also the economy of all the islands;
Whereas the fishing trade, while the oldest of the country, is still the least remunerative;
And whereas the fisherman believes his trade important enough to warrant the authorities' interest so that he may enjoy a living standard comparable to that of other Canadians . . .
The fishermen then request from the provincial government insurance on fishing gear and a subsidy on fishing boats.
As for the subsidy for fishing craft, the federal government's order in council P.C. 1919, dated May 22, 1947, empowers the Minister of Fisheries to pay fishermen subsidies of $165 per ton for the building of fishing craft not less than 55 feet long. This order in council authorizes the payment of these subsidies for the fishermen's benefit through fishermen's loan, boards to be set up by the provinces.
As there are, as yet, no such boards in the province of Quebec, our fishermen cannot benefit from these loans. I have already mentioned this matter in the house when. I suggested, in my speech of September 28, 1949, which is reported at page 325 of Hansard, that the provincial government set up the required organization so that the fishermen of the Magdalen islands might benefit from these subsidies.
I am happy to say that following correspondence and interviews between the federal and provincial ministers of fisheries, the federal government is now considering an amendment to the order in council so as to reduce to 45 feet the length of fishing craft eligible for the subsidies; this would meet with the views of the Quebec provincial government, which is in favour of building boats shorter than 55 feet, the length provided. I am also told that the government of the province of Quebec will establish the necessary organization so that these federal subsidies may be paid to the fishermen of Quebec province, as they are already paid to those of New Brunswick and Nova Scotia.
The building of larger ships would be a great boon to the fishermen, of Quebec province in general and to those of Magdalen


islands in particular. With such ships, fishermen could go further offshore, make longer trips and bring in larger hauls. I am sure that is the best solution to the fishermen's difficulties. These changes, when they come, will be a fine example of federal-provincial co-operation.
The brief presented by the fishermen to the federal government requests:
(1)	a support or floor price in line with the present cost of living;
(2)	price controls on essential fishing gear and
(3)	extension of unemployment insurance to fishermen.
Let us study these requests one by one.
As far as price support is concerned, there is a federal organization known as the fisheries prices support board. I have .had several interviews with this board and with its technical adviser.
In order to stabilize the price of fish, the board is authorized to fix a floor price. If fish is sold at a lower price, the board is empowered to pay the fisherman the difference between the floor price and the actual selling price.
I have had long interviews with the Minister of Fisheries as well as with the deputy minister and their technical advisers. I take this opportunity to thank them for the time and attention they have been so kind as to give the problems of my constituents.
There would of course be two ways of fixing a floor price, either before or after the fishing season.
I asked, Mr. Speaker, that the price be set before the beginning of the fishing season. In other words let the government guarantee the fishermen a certain minimum price fixed in advance. After the matter was thoroughly discussed and the effects of such a policy carefully considered, I was told: that if the government fixed a minimum price and guaranteed to pay the difference, if the buyers paid less than that price, the effect would be to disorganize the fish market. In fact, the buyer would naturally be inclined to pay a very low price and the fishermen would not have much to gain in asking more, for both would know that the government would pay the difference. It would be practically impossible for the government to protect itself againist the buyers ini such a case.
Furthermore in setting up a guaranteed minimum price before the marketing season

the government would hinder the marketing of fish products on the ultimate markets. In fact, these buyers knowing that the government would pay a subsidy to the fishermen to compensate them would also be tempted to pay less for the products offered to them. Such subsidies would also cause us difficulties with many countries with which we have trade agreements. The paying of subsidies would stop the exporting of our fish to many of those countries, particularly the United States-, because subsidized commodities are subject to embargo and high duties.
I therefore think it would not be practical to set up in advance a minimum price for fish.
The only solution would therefore be for the prices support board to make a payment to the fishermen at the end of the season if the prices received were not sufficient to ensure them an adequate return.
Obviously, Mr. Speaker, the federal government cannot make rules for the special use of the Magdalen islands. If the fisheries prices support board sets a minimum price for cod, mackerel, lobster, and so on, the price applies to all Canada, Newfoundland included. Before establishing a price, the government has to know the size of the catch in Newfoundland and the price it has fetched. The government knows the price that applied in 1950 to all parts of the country with the exception of Newfoundland where complete statistics on the catch and on the prices have never been kept. The fisheries prices support board is now making a survey of the situation in Newfoundland. As soon as the government has the figures concerning the amount of fish caught in Newfoundland and the prices which prevailed, it will decide upon the advisability of fixing a minimum price for 1950, and, if applicable, will determine the amount.
I urgently request the Minister of Fisheries to seriously consider the situation in which the fishermen in my riding find themselves, when the question of support prices for fish comes up for discussion.
According to the information I have, the fish prices support board has not yet exercised its powers to set floor prices for fish and to make payments to fishermen. I respectfully suggest to the minister that the time has come for the board to exercise those powers.
I hope, therefore, Mr. Speaker, that the survey which is now being made in Newfoundland by this government will warrant setting a floor price for fish and that the
The Budget-Mr. Cannon first request of the fishermen will be granted. If the price paid in Newfoundland happens to be higher than that paid in the Magdalen islands, let the former be set as the floor price, and let the difference be paid to the islands fishermen.
The second request in the brief of the fishermen deals with price controls on fishing gear. It is unfortunately impossible to put a ceiling on prices of fishing gear without imposing general price controls, and, we all know, the government is not yet ready to take this step.
However, the budget does contain provisions to help the fishing industry. One will permit free entry of diesel engines for ships used exclusively in commercial fishing. The other will enlarge the scope of provisions already exempting from customs duties fishing nets and- fishing lines, so that they will cover nets or lines manufactured from any kind of material.
The dominion government is also doing its share in keeping the price of fishing gear as low as possible, by exempting it from the sales tax.
In its issue of April 10 last, Le Devoir published interesting figures showing the difference between the price of fishing gear in 1944 and 1950.
I have checked the list and found that the following items are exempt from tax: rope, lath for lobster cribs, lumber for boats, hand fishing lines, fish nets, barrels used for the salting of fish and motors used in fishing boats.	;
Among articles used solely by fishermen, only rubber boots and clothing as well as motor oil and gas are subject to the sales tax. I will make representations in order to have those articles exempted from the tax.
Thirdly, fishermen request unemployment insurance benefits. As early as last spring, one year ago, I made representations to the unemployment insurance commission and the Department of Labour in order to bring fishermen under the act. The unemployment insurance commission began a nationwide survey to secure the necessary information and data before reporting on this request. I understand that the report is in preparation and hope that the government will be able to include fishermen in the benefits of this legislation which has already been extended to lumberjacks.

The Budget-Mr. Cannon
If it is not possible to apply it immediately to fishermen who are not employed on a salary basis, I suggest that it be extended at least to salaried fishermen's help. That would be a first step in the right direction.
I hope, Mr. Speaker, that the government and in particular the Minister of Fisheries will take these requests into earnest consideration.
I felt it was my duty . . .
(Text):


George Alexander Drew: Mr. Speaker, in extending-


Mr. Speaker:: Order. On a point of order, the leader of the opposition.


George Alexander Drew: Mr. Speaker, there has been an indication of the willingness of the house to extend time for the hon. member, but I think we should know how many more pages he is going to read before we extend it any further.


Charles-Arthur Dumoulin Cannon: I have just a few lines left.


George Alexander Drew: The hon. member has read seven pages since he indicated he was about

finished. I think we should know how many more he is going to read.


Mr.   Coie@Malapedia-Malane: How many more do you want?
(Translation):


Charles-Arthur Dumoulin Cannon: I would like to tell the leader of the opposition that I have finished. I felt it was my duty to state these requests during the debate on the budget, since they express the will and the desires of almost all my constituents.
(Text):


George Alexander Drew: Mr. Speaker, I move the
adjournment of the debate.
Motion agreed to and debate adjourned.



BUSINESS OF THE HOUSE

Alphonse Fournier: Mr. Speaker, tomorrow we shall continue this debate, and after the vote we shall take up the budget resolutions.


[Stage Direction]
It being ten minutes after eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Wednesday, April 25, 1951